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03-30-2009, 11:04 AM
Spillover from oil decline hitting Alberta's auto sales, report says
By Mario Toneguzzi, Calgary HeraldMarch 30, 2009 11:01 AMBe the first to post a comment
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Cars on the lot of Alberta Motor Products in Fort McMurray.Photograph by: Dean Bicknell, Calgary HeraldVehicle sales in Alberta are forecast to drop by almost 40,000 compared with last year, says a report released today by Scotia Economics.
The Global Auto Report, by economist Carlos Gomes, predicts vehicles sales to fall to 195,000 this year in the province. A year ago, they were 232,000 while in 2007 vehicle sales soared to 249,000.
“After a solid performance through October, Canadian vehicle sales began to slump in late 2008 as the previously robust resource economies of Western Canada succumbed to the global economic downturn,” said the report. “We have reduced our 2009 Canadian sales forecast to 1.38 million units as the weakness has intensified alongside a sharp reversal in purchases in British Columbia and Alberta. Preliminary data through February indicate that sales in these two provinces have plunged 35 per cent year over year — nearly 10 percentage points worse than in the rest of Canada.”
The auto report said that in Alberta the sharp decline in oil prices from their mid-2008 peak has led to more than a 30 per cent drop in drilling activity and the cancellation of more than $40 billion in capital projects, including new oilsands upgraders. This “loss of momentum” has spilled over to services, with retail sales “grounding to a halt” and vehicle sales posting double-digit year-over-year declines since November.
“Unemployment has jumped by nearly two percentage points since late 2008, and is currently at the highest level in nearly six years,” added the report. “Confidence and spending have been hard hit by the broad-based slowing in job growth and the loss of wealth associated with declining home prices.
“We expect vehicle sales in Alberta to decline to 195,000 in 2009 — the lowest level in five years — amid rising unemployment and weakening home prices.”
In Canada, total vehicle sales reached 1.642 million units in 2008. Sales in 2007 were 1.614 million.
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http://www.calgaryherald.com/Business/spillover+from+decline+hitting+alberta+auto+sales+report+says/1444573/story.html
By Mario Toneguzzi, Calgary HeraldMarch 30, 2009 11:01 AMBe the first to post a comment
StoryPhotos ( 1 )
Cars on the lot of Alberta Motor Products in Fort McMurray.Photograph by: Dean Bicknell, Calgary HeraldVehicle sales in Alberta are forecast to drop by almost 40,000 compared with last year, says a report released today by Scotia Economics.
The Global Auto Report, by economist Carlos Gomes, predicts vehicles sales to fall to 195,000 this year in the province. A year ago, they were 232,000 while in 2007 vehicle sales soared to 249,000.
“After a solid performance through October, Canadian vehicle sales began to slump in late 2008 as the previously robust resource economies of Western Canada succumbed to the global economic downturn,” said the report. “We have reduced our 2009 Canadian sales forecast to 1.38 million units as the weakness has intensified alongside a sharp reversal in purchases in British Columbia and Alberta. Preliminary data through February indicate that sales in these two provinces have plunged 35 per cent year over year — nearly 10 percentage points worse than in the rest of Canada.”
The auto report said that in Alberta the sharp decline in oil prices from their mid-2008 peak has led to more than a 30 per cent drop in drilling activity and the cancellation of more than $40 billion in capital projects, including new oilsands upgraders. This “loss of momentum” has spilled over to services, with retail sales “grounding to a halt” and vehicle sales posting double-digit year-over-year declines since November.
“Unemployment has jumped by nearly two percentage points since late 2008, and is currently at the highest level in nearly six years,” added the report. “Confidence and spending have been hard hit by the broad-based slowing in job growth and the loss of wealth associated with declining home prices.
“We expect vehicle sales in Alberta to decline to 195,000 in 2009 — the lowest level in five years — amid rising unemployment and weakening home prices.”
In Canada, total vehicle sales reached 1.642 million units in 2008. Sales in 2007 were 1.614 million.
[email protected]
http://www.calgaryherald.com/Business/spillover+from+decline+hitting+alberta+auto+sales+report+says/1444573/story.html