Oil industry fallout spill over into the rest of the Canadian economy
Although many Canadian companies have been able to take advantage of the current weak loonie, plunging crude oil prices have exerted much stronger downward pressure on our economy as a whole, concludes the Bank of Canada’s quarterly Business Outlook Survey released yesterday.
Survey respondents confirmed that they expect to reduce their investments in machinery and equipment over the next 12 months. Their hiring plans are also down to the lowest level since the recession of 2008- 2009.
There is a glimmer of hope on the horizon for a rise in crude oil prices with the reopening of several refineries, which typically close for spring maintenance, but are now said to be ready to pump out gasoline at record speeds in the run-up to the peak summer driving season. An increase in refinery output, combined with the closing of nearly half the drill rigs south of the border, could reduce pressure on crude oil inventories, which now sit at an all-time high.
