CALGARY — The Conference Board of Canada laid out a grim outlook for employment for this year and next on Monday, saying the Canadian economy fell “off a cliff” in the first three months of this year.
Pedro Antunes, the board’s director of national and provincial forecasts, told a conference Monday that unemployment will steadily rise this year and peak at 9.5 per cent in the middle of 2010.
“We’ve seen some pretty dire monthly numbers already,” Antunes told reporters. “We see employment losses continuing through the end of the year, but not as sharp a decline as we’ll have in the first quarter.”
The think-tank estimates Canada’s economy shrank at a seven per cent annual pace in the first quarter, Antunes said.
“It’s not really a difficult guess to make because if you look at the monthly indicators, if you follow monthly (gross domestic product) by industry, it’s kind of fallen off a cliff in the latest months,” he said. “It’s very scary.”
Conference Board chief economist Glen Hodgson said in an interview that Canada has likely just emerged from the worst quarter in 35 or 40 years.
“Seven per cent annualized in Q1 is really painful and that reflects the contraction of exports and the pullback in investment that’s due to the U.S. financial crisis.”
But, the pace of the slowdown will ease later in the year, resulting in a 1.7 per cent contraction for the year as a whole, Antunes said. That’s far worse than the Conference Board’s previous estimate of half a percentage point decline for 2009.
“It was really around commodity prices and the impact that’s having on real incomes in our economy. We saw the price of everything fall,” Hodgson said.