With the new year around the corner, it is always good to take a brief look ahead at the global economy to see what 2018 could have in store. The following are three charts selected from the McLean's 91 most important economic charts to watch in 2018.  

 

Canada's advantage: ready-to-work immigrants

Stefan Marion, Chief Economist, National Bank of Canada

Canada's population growth has remained highest among mature economies, averaging 1.2% annually. Immigration contributes heavily to this growth, and Canada is also a leader in attracting quality talent for our workforce. The OECD estimates that 170,000 of the 272,000 people granted permanent resident status in 2018 were admitted under the 'economic category', meaning they were selected for their ability to become economically established in Canada. It is estimated that 63% of immigrants granted residency in Canada are ready to join the labour force, with only 13% and 4% able to do so in the U.S. and Germany. This influx of productive members of the workforce will help to balance slowing birth rates, and carry the economy forward by generating further household formation and growth.

 

Is the Euro zone's lost decade finally over?

Stephen Gordon, Professor of Economics, University of Laval

 

Canadian businesses looking to expand into international markets should carefully watch GDP growth in the Eurozone. Long stagnant, the European economy is finally starting to show signs of an upward trend after the great financial crisis. In the wake of the Canada-European Comprehensive Trade Agreement, Canadian exporters will have a host of new opportunities in these potentially rapidly expanding markets, offering a welcome respite in wake of potential modifications to NAFTA. If GDP growth does trend up steadily, the European market could see heavy demand for imported Canadian goods, and local exporters will benefit from the lack of trade barriers.  

The return of the bitumen bubble

Andrew Leach, Associate Professor, University of Alberta School of Business

Despite recent upswings in global benchmark oil prices, such as a more than $10 increase per barrel in Brent crude, the price of bitumen has remained relatively flat, resulting in multi year highs in the discount faced by Alberta in the last month. This has the potential to largely affect the provincial budget, as the government relies on bitumen royalties specifically. The discount is largely the result of supply gluts being faced in areas where bitumen is easily transported, resulting in the increased focus in further pipeline infrastructure development and the renewed focus on getting bitumen to tidewater ports. Even so, the recent increase in oil price could have negative effects on the long-term stability of the price per barrel of oil: with renewed profits and leaner process costs after the last price drop, American shale producers will be emboldened to continue expanding production, increasing the oil reserve oversupply and potentially negating the efforts of OPEC, who's production slowdown has helped to precipitate the price increase. 

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