September 26, 2007
CanaData Construction Industry Forecasts Conference 2007
Jestin tells construction industry leaders that infrastructure, skills should be priorities
As Canada’s loonie soars to parity with the American greenback and surpluses grow, infrastructure and skills investment should be government priorities, according to Scotiabank’s chief economist.
“We need to build world class infrastructure,” said Warren Jestin. “Also, we are not doing enough value-added, skills training.”
Jestin recently spoke at the CanaData Construction Industry Forecasts Conference about the global repositioning of both the Canadian and American economies. Canada’s economic growth is pegged at 2.5 per cent and it has “strong long term resource potential.” Thanks
to booming oil and resource production, Canada has repositioned itself globally.
“Canada nowadays is considered a resource rich country in a resource short world,” said Jestin. “There is enough economic juice in Canada to expand its economy.”
The budget surpluses accumulated by Canada’s various governments would best be used paying down their debt on a consistent basis, focusing on capital and infrastructure investments and cuts in taxes, said Jestin.
This surplus use formula would help strengthen Canada as the global economic landscape shifts, he said. Countries like China, India, Russia, Mexico and Brazil are growing rapidly and demanding more resources and goods.
Jestin points to motor vehicle production as an example of this demand. China has experienced an incredible 252 per cent increase in this sector from 2000 to 2006.
During this same period, India clocked in with an impressive 125 per cent increase followed by Russia at 25 per cent. Canada registered a 13 per cent decrease and the United States 12 per cent decrease in this sector during this time frame.
“The economic geography of economic activity is changing very rapidly,” said Jestin.
Providing the flavour to Canada’s “economic juice” are increases in commodity exports of crude petroleum, natural gas and mining despite continued declines in vehicles and parts and forest products.
Western provinces are currently leading Canada’s performance with Alberta and British Columbia driving non-residential construction.
The largest labour market demands are in the growing provinces of British Columbia, Alberta, Saskatchewan and Manitoba.
“Growth will be best in the west for the foreseeable future,” noted Jestin.
The demand on labour will continue for things which are “indigenously supplied,” such as construction, education and health care, said Jestin.
Alberta’s unemployment rate of 3.5 per cent, followed by those of Saskatchewan, British Columbia Manitoba all hovering around four per cent, place all the western provinces below Canada’s nationwide average of six per cent.
The budget surpluses in western provinces, on a per capita basis, outpace the rest of Canada’s provinces and even the federal government, said Jestin. Alberta has a budget surplus of $2,500 per capita versus the federal government’s approximate $250 per capita budget surplus.
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