The Oil Gauge
You probably knew Canada has been faring better than most developed countries in the aftermath of the Great Recession. Here's some more evidence - the country has been guzzling oil like it was a hot cup of Tim Hortons.
From January through July, the growth in Canadian demand for petroleum easily outstripped each of the other major members of the Organization for Economic Co-Operation and Development, according to data from the Energy Information Administration.
At a seven-month average of 2.23 million barrels per day, Canadian oil demand grew by 3.7 per cent compared to the daily average in 2009. (Growth over the comparable January to July 2009 period was nearly 4 per cent.)
By comparison, demand by the United States grew 1.1 per cent over the average 2009 oil usage. In South Korea, growth was 1.7 per cent.
Other nations still wrangling with the economic downturn have shown declines in 2010. Europe as a whole is using 1.7 per cent less oil than a year earlier. Italy is down 2.9 per cent, while the United Kingdom is off 2.2 per cent.
Canada's July demand for 2.31 million barrels was the biggest month since February 2008. The peak year for Canadian oil demand was 2005.
Canada's rebound makes it the star of the G7, Bank of Canada Governor Mark Carney said last week in a speech in Geneva. The cumulative fall in real GDP of 3.4 per cent in Canada compares with declines of over 4 per cent in the United States, 5 per cent in the euro area, and 8 per cent in Japan, he said.
A U-turn in Car Sales
Statistics Canada has said its official numbers for new motor vehicle sales in September, to be released today, should show an increase in sales. If so, the people of Ontario will have needed to change their buying habits.
StatsCan said last month that sales activity suggested that vehicle sales would rise 4.0 per cent in September from August levels; that will be a nice turnaround from August, which saw a 4.8 per cent decline from the prior month. (There is a significant lag in the StasCan data, as industry analysts have compiled numbers from the automakers for September and October already. Yet the StatsCan report gives us a formal look at how vehicle sales varied by province, rather than manufacturer.)
The chief culprit in the August fall was Ontario, where vehicle sales fell 8.9 per cent from July to August. Since roughly 30 per cent of all Canadian new motor vehicle sales take place in the province, any big gain or loss in Ontario will goose the national numbers.
Indeed, strip out the Ontario results, and vehicle sales fell just 2.3 per cent from July to August. In a year-over-year comparison of August 2010 to August 2009, removing Ontario's 2.0 per cent decline would more than double Canada's vehicle-sales gain: It's 1.3 per cent with the Ontario numbers, 3.3 per cent without.
The hottest province for vehicle sales? Alberta, which posted a 2.4 per cent gain from July to August and a year-over-year leap of 13.5 per cent.
Surprised by Good News
A string of surprises is turning equity analysts more positive about third-quarter earnings for the country's major issuers, notes Benoit Mayer-Godin of National Bank Financial.
Mr. Godin has been tracking the analysts' consensus each week to measure sentiment. Expectations for the third quarter peaked in late June, only to get shattered by Manulife's record second-quarter loss. As analysts marked down their third-quarter expectations for the insurer, Manulife's results dragged down the overall consensus for the S&P/TSX composite.
"That said, results so far in this Canadian earnings season are surprising on the upside," Mr. Godin writes, with an average surprise of 7 per cent. When companies began to report three weeks ago, the consensus was pointing to a 9.5 per cent year-over-year gain. The expectation is now 14 per cent - and a whopping 27 per cent excluding financials.
"Once again, Manulife is impacting results, but with a positive tone this time around," Mr. Godin said, with the company's loss of 55 cents per share beating the 77 cent-per-share loss expected. Manulife's numbers, coupled with a surprise from Sun Life, explains a third of the resurgence in the S&P/TSX earnings per share over the last two weeks.
"All in all, we think there is still room for more positive surprises … That could push the Q3 [earnings per share]growth rate further up," he said.