The Sudbury Star is the City of Greater Sudbury’s daily newspaper.
In the next 12 months, Canada will see changes in the housing market, commodity prices and a focus on the big story – household debt — the managing director and deputy chief economist of BMO Capital Markets says.
But Douglas Porter has other concerns. “By this point, Dec. 11, I thought we’d have a lot more clarity on at least one critical issue for the Canadian economy. I thought we’d have more information on the NHL lockout,” he joked.
On Tuesday, Porter spoke to about 100 people at the Greater Sudbury Chamber of Commerce luncheon about “Outlook 2013: looking beyond the cliff,” what the Bank of Montreal sees for the world’s major markets over the next 12 months.
Overall, Porter said, the outlook is positive. “If I were to speak to you just a little more than 12 months ago, the markets were actually in a fairly sour mood and we were worried about a downturn. But over the last year, the markets have swung much more to the optimistic end of the spectrum.”
The biggest risk for the global economy, he said, is still the European debt crisis. While great strides have been made on that front, there is still the possibility of a downturn.
Another issue of concern is about the slowdown in China. However, there is reason to be optimistic, according to Porter.
“(This concern has) affected the metals market here in Sudbury,” he said. “Lately there have been some signs of stability in China’s economy … we’re actually optimistic for China in 2013.”
While household debt in Canada is at an all-time high – averaging about $1.60 for every $1 earned – it pales in comparison to what’s going on elsewhere.
“It’s a serious issue, but it’s not the kind of thing that’s going to tip the economy into a downturn over the next year,” Porter said.
What’s most important in Sudbury, he added, has to do with the commodities super cycle – specifically, is it over?
“The commodities super cycle is basically the fact that we’ve had this nice run-up in commodity prices over the last 10 years, much faster than other prices and that has (very much benefited) the Northern Ontario economy.
“Commodity prices do have a firm base over the next 10 years,” he continued.
For the rest of this article, please go to the Sudbury Star website: http://www.thesudburystar.com/2012/12/11/bmo-bullish-on-sudbury-canadian-economies