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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (43196)	3/15/2006 1:47:23 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69291

Good GDP growth may face slowdown as boomers retire Lack of workers big problem: Forecast But living standards could still improve Mar. 15, 2006. 01:00 AM SANDRA CORDON CANADIAN PRESS OTTAWA—Canada's healthy GDP growth rate, which now averages about 3 per cent per year, will be slowed dramatically by an aging population and weak immigration in the coming years, warns a new economic forecast. Yet, living standards may still improve as a growing world economy demands more Canadian goods and employers make the most of every scarce worker, pushing up productivity, concludes the forecast outlined yesterday by economists at Global Insight. For now, unemployment is low, inflation tame and growth at pretty much full capacity, analysts said. "The Canadian economy is in solid shape relative to historical performance as well as relative to other developed countries," and the gross domestic product will likely expand by a "very decent" rate of roughly 3 per cent this year, said Dale Orr, Canadian managing director of the forecasting firm. But serious problems loom by the end of the decade, as baby boomers begin to retire and the rate of immigration into Canada remains too modest to take up the slack, warns the forecast. Making matters worse, new immigrants over the past 15 years have shown "disappointing" economic performance, a point against trying to hasten the intake of new workers, added Wojciech Szadurski, senior economist. Much of that sluggish performance is due to continued difficulties skilled immigrants face in trying to have foreign credentials recognized here. "Canada appears to be on the verge of economic transformation, driven by demographic change," Szadurski said. "GDP growth is going to slow down quite a bit over the long term and will fall from 3 per cent to below 2 per cent," he said. By 2020, it could drop as low as 1.7 per cent — about half the current pace. An employment growth rate of about 1.9 per cent has helped sustain today's pace of GDP expansion, but the rate at which new jobs are added will dramatically slow and even stall within about 20 years, he warned. But, living standards should rise from current levels of $38,000 per capita in this decade to slightly over $50,000 by about 2030, measured in constant 1997 dollars, according to Global Insight. Governments could encourage more productivity — and therefore, higher living standards — by cutting taxes and improving the quality of post-secondary education, Szadurski said. Critics say none of those factors are high on the agenda of the new Conservative government, which is focused on reducing consumption taxes.