TORONTO, Feb. 4 /CNW/ - With Canadian consumer confidence at its highest
level since last spring, and new job creation advancing at a rate of
15,000 a month, vehicle sales continue to strengthen, according to
Scotia Economics' latest Global Auto Report.
"The resource-rich provinces of Alberta, Saskatchewan and Newfoundland
will lead the improvement in car and light truck sales across Canada in
2011," said Carlos Gomes, Senior Economist, Scotia Economics.
"Commodity prices posted a double-digit increase in 2010, and will
continue to advance this year alongside a strong and sustained economic
recovery, particularly in the fast-growing emerging nations."
Alberta will lead the improvement in vehicle sales across Canada in
2011, with purchases expected to climb to 210,000 units, up from
200,000 last year and only 182,000 in 2009. Volumes will be buoyed by a
double-digit increase in oil sands production - the sharpest gain in
five years. The revival in the oil patch has already lifted employment
in Edmonton three per cent year over year - a percentage point above the national average, and one of the
strongest advances among major Canadian cities. Population flows are
also once again attracted to Alberta, and will lift the vehicle-buying
age population in the province by more than two per cent annually over the next several years - the largest increase
among the provinces.
Vehicle sales in Saskatchewan have also started to rebound alongside
rising mineral production. Purchases jumped six per cent last year to
46,000 units and will reach 48,000 in 2011 - a level matching the
recent peak set in 2008. The agricultural sector will also start to
bolster economic activity in 2011, reversing double-digit declines
since the third quarter of 2009.
Newfoundland and Labrador is also benefitting from the rebound in the
energy sector, with vehicle sales jumping by 11 per cent last year to a
record high of 32,000 units - more than 20 per cent above the average
of the past decade. However, the gain will moderate in 2011, as the
province now has the youngest vehicle fleet in Canada. In addition, a
declining driving age population will also dampen sales gains.
Looking at the rest of Canada, purchases in British Columbia will climb
to 157,000 units in 2011, up from 154,000 in 2010. Activity will be
bolstered by strengthening exports to Asia - the destination for 40 per
cent of the province's overall exports. In particular, exports to China
have surged by 60 per cent over the past year, and are now more than
double 2007 levels.
Fleet volumes in British Columbia will also start to edge higher this
year, reversing the 60 per cent plunge since 2006. In fact, the slump
in fleet purchases was sharpest in British Columbia, roughly double the
decline in the rest of Canada. This likely reflects the prolonged
weakness in the province's forestry sector, which until recently, was
the largest source of export earnings.
Sales in Manitoba are expected to advance to 46,000 units in 2011,
matching the 2008 annual peak, and up from 44,000 last year. The
province has the most stable auto market in Canada, with volumes
posting an annual peak-to-trough decline of only seven per cent during
the latest downturn - significantly outperforming the 12 per cent drop
in the rest of Canada. The stability in the auto market reflects
Manitoba's diversified economy, which enabled the province to avoid a
contraction during the latest global economic downturn.
Vehicle sales in Ontario jumped eight per cent last year, climbing to
576,000 units from a 13-year low of 536,000 in 2009. A 40 per cent
surge in vehicle production bolstered purchases and job creation across
the province last year. In fact, Oshawa posted the strongest employment
growth among Ontario cities last year, with payrolls advancing by five
per cent. Vehicle assemblies are likely to climb an additional nine per
cent in 2011, helping to lift car and light truck sales in Ontario to
586,000 units - the highest level since 2007, and only three per cent
below the average of the past decade.
Car and light truck sales in Quebec were higher than expected in 2010,
advancing by six per cent to 415,000 units. Purchases were supported by
ongoing government stimulus, which helped lift fleet purchases by eight
per cent last year. However, despite the recent acceleration in the
global economic expansion, sales gains in the province will moderate to
about two per cent in 2011 - held back by cutbacks in government
spending. In particular, infrastructure expenditures in Quebec are
expected to decline by about six per cent per annum over the next
Nova Scotia was the only province to post a small decline in vehicle
sales last year, but will likely post a small gain in 2011. Activity in
the province will be supported by the upcoming 2011 Canada Winter Games
in Halifax, which will boost tourism. Car and light truck sales are
likely to be flat in both New Brunswick and PEI this year, following
double-digit increases in 2010. In both provinces, activity was
supported by ongoing capital projects, but job growth has recently
Scotia Economics provides clients with in-depth research into the
factors shaping the outlook for Canada and the global economy,
including macroeconomic developments, currency and capital market
trends, commodity and industry performance, as well as monetary, fiscal
and public policy issues.
SOURCE Scotiabank - Economic Reports
For further information:
Carlos Gomes, Scotia Economics, (416) 866-4735, firstname.lastname@example.org; Patty Stathokostas, Scotiabank Media Communications, (416) 866-3625, email@example.com