Statistics Canada today released the 2009 Accounting Services Price Indexes for Canada as a whole. We have been tracking these indexes for Ontario, but these, along with other regional figures, are no longer available due to a redistribution of wealth within the Federal Government.
Here are the indexes for Canada graphed from their inception:
[Eric's note: Although this note, like all of Stewart's, are archived elsewhere on this site, I had to give this one it's own post after reading the last sentence.]
May housing starts decline by -6.3% month-over-month.
Canadian housing starts come to a stop in May, with the rate of construction slowing to 189.1K units on an annualized basis. This is well back of April’s rate of construction at 201.7K. Market expectations had been looking for 202.0K, while our own pessimistic forecast was looking for 192K.
In producing the forecast we had leaned heavily upon the April building permits data from last week. Numbers that reflected some significant softening up in builder intentions with approved units for construction down -8.2%m/m in the multi family dwelling category. Equally soft was the -6.4%m/m decline in the number of approved units in the single family dwelling category. Overall, housing starts are down -6.3% from the previous month.
Underneath the headline softness, despite a decline of nearly 6K in the mutli family unit category, starts at 92.8K is still reflective of heightened levels of activity. By contrast, the bulk of the headline softness was borne by the single family category which fell by 12K to a rather depressed pace of activity of 72.4K units. On the upside, rural starts bounded back, rising from a depressed 19.2K to 23.9K units.
Overall, the picture on the housing market, whether we are talking about the new build or the existing home category, the expectations going forward into the second half of 2010 and 2011 are for reduced levels of activity coming down from the historical highs that have been reached. A moderation/slowing in the pace of activity that will be led by higher financing costs, changes to the funding and financing formulas for mortgages and changes in the tax structure in Ontario and BC which host two of Canada’s most active housing markets.
In keeping with this theme of slowing activity for the housing market, the Canada Housing Trust (CHT) indicated that they may sell 15% less debt this year as fewer mortgages are expected to be raised and funded.
One way of thinking about the less pronounced decline in the mutli family category is from a cyclical standpoint. Although early on into the business cycle, Canada has a housing market that is already deep into its cycle. Given that home prices are at historically high levels, along with changes in the funding models that will raise the barrier to entry into home ownership, builder interest may very well be favoring multi family unit construction as higher overall costs force consumer demand into the multi family category that tends to come in at lower pricing points than is the case for single family residences.
None the less, the Bank of Canada and fiscal agents together have drawn a deep breath which, when exhaled, will invariably blow some of that froth off the housing market mug.
Statistics Canada has released the 2008 edition of Service Bulletin: Accounting Services, which contains industry highlights along with financial data including revenues, expenses, and operating profit margins. The publication also includes product information, data by type of client and by geographic region.
Download a free copy: http://bit.ly/amv7XV
If you like pretty, coloured graphs, see our own, based on the same data.
The highlights of the StatsCan report are as follows:
• In 2008, the operating revenue of the Canadian accounting services industry totalled $12.5 billion, up 10.3% from 2007. This growth rate was in line with the double digit growths of 2005 (13.6%) and 2006 (11.6%), but higher than 2.5% growth in 2007.
Market and forecaster sentiment alike was largely cemented earlier in the week with the release of the BoC’s post meeting statement on Tuesday. The collective catalyst – a ceremonious dropping of the BoC’s conditional pledge to hold rates at 0.25% through to the end of Q2/10 – pulled to the fore, a June rate hike scenario. While the Governor will emphasize that nothing is preordained, the impact of the act of removing of the conditional rates pledge was to focus the various elements of Canadian monetary opinion into a fairly narrow beam of expectations.
Both the Q1/10 business outlook survey and the senior loan officer survey were largely as was expected. The headline future sales sentiment index remained strong at 44.0 vs. although somewhat softer than the previous quarter’s 49.0 as the initial flush of economic recovery begins to fade. And while inflation expectations drifted higher in the first quarter of 2010, conversely, the index of capacity constraints remained benign.
Statistics Canada recently released the 2007 Accounting Services Prices Indexes, only 2½ months after the 2006 Indexes. Inflation in tax preparation fees slowed significantly in 2007, with corporate tax preparation
I have posted today’s note from Stewart here.
He writes, “Despite historically low interest rates, consumers are being priced out of the market for
Stewart Hall, economist for HSBC Securities Canada, provides excellent periodic notes on the Canadian economy. Here is the latest one, for your consideration:
Stewart Hall January 29, 2010 Note
My two cents: “V” is the first half of “W”.
Another 18,000 Ontarians made an insolvency filing in the third quarter of 2009, bringing the total to 51,000 for the year so far.
This means that about 1 in every 200 Ontario adults filed a proposal or made an assignment in bankruptcy in just three-quarters of 2009.
If you want to see the results in graphical form, they can be found here. The raw data was published here.
This flood of insolvencies, running at about 40% above 2008 rates, has come in a period of historically low interest rates and is likely the result of higher unemployment. Unemployment does not look to be declining and interest rates have nowhere to go but up. We have also produced charts showing the close correlation between consumer insolvencies and unemployment.
During Q3 2009, the rate of insolvencies remained steady in Toronto, Ottawa, London, and Kitchener-Waterloo-Barrie. The rates fell in Muskoka-Kawarthas, Hamilton-Niagara, and the Northwest. Rates have continued to rise during Q3 2009 in Windsor-Sarnia, Kingston-Pembroke, Stratford-Bruce, and the Northeast.
If you have an opinion or story about how your practice is coping with the current recession, please leave a comment!
GrossmanCGA published today the first-ever graphs of quarterly regional Ontario consumer bankruptcy and insolvency statistics.
Using data provided by Statistics Canada, these graphs illustrate local trends in consumer bankruptcies, proposals, and total insolvencies. The graphs for each region are available exclusively from GrossmanCGA.
General comments on provincial trends and their import for accountants in public practice were published earlier as Ontario Consumers are in Trouble.
When I saw the June bankruptcy numbers, I just had to share them with you. They amaze me.
In the first 6 months of 2009, more than 33,000 Ontarians (1 out of every 300 adults!) made filings under Canada’s Bankruptcy and Insolvency Act. That’s a record number both absolutely and as a proportion of the adult population. Each region in the province differs somewhat, but the trend is
