A New Perspective
by Trey Barrineau
November 9th, 2015

How are Things Up North?

Here’s one key takeaway from last week’s Win-door North America trade show in Toronto — it looks like the Canadian market for doors and windows could be facing a slowdown.

As economist Warren Jestin made clear during his presentation last Thursday morning, Canada’s economy is struggling.

“Growth in Canada will have a hard time getting to about 1 to 1 ¼ percent this year,” he said during his presentation.

The reasons? Softening global prices for commodities such as metals and wood products, and lower prices for oil. Canada, a commodity-rich nation, needs higher prices for those products or it hurts the Canadian dollar, Jestin said. He noted that the Canadian dollar is  not expected to go above 80 cents relative to the U.S. dollar in the next 18 months.

But there are warning signs specific to housing as well.

In October, Michael Babad of the Globe and Mail reported that Moody’s Analytics is deeply concerned about a housing bubble in Canada, particularly in Toronto and Vancouver.

“The song I’m Forever Blowing Bubbles … describes how extravagant dreams fade away once reality sets in,” Moody’s economist Paul Matsiras said in his report. “Increasingly, it seems this is being felt in Canada, which has seen some of the fastest house price growth in the world over the past year in cities such as Toronto and Vancouver.”

Babad also reported that The Economist is concerned  about the Canadian housing market as well. The magazine says homes are overvalued there 34 percent against disposable income, and it called housing in Canada “scarily overpriced.”

Perhaps that’s one reason why Win-door wasn’t bustling this year — the industry up north might be tightening its belt a bit.

Thoughts? Leave them in the comments below.


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