Canada could ride out global gloom

From the National Post …

The same investment bank that said on Monday the United States was already in recession, predicted on Wednesday Canada would pull through with "the best relative performance ... in modern times."

David Wolf, Merrill Lynch's Canadian analyst forecast Canadian real GDP would trough at 1.3% year-over-year in the third quarter, down from 2.9% in the fourth quarter of 2007 and a nearby peak of 3.6% in the first quarter of 2006.

Canada's housing market looks nothing like the United States with activity and prices still rising and crucially owner's equity - which could be tapped for spending - running over 70% compared about 50% for the United States where it has shrivelled from 55% in mid-2005.

No doubt employment and wage growth will slow, but Canadian consumers are in much better shape, and Mr. Wolf forecasts another "boring" year of 3.9% consumer spending growth in 2008 after ranging between 3.5% and 4.5% in every quarter since mid-2004.

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