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Canada economy shrinks for first time in eight months, hit by U.S. auto strike – Financial Post

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OTTAWA — Canada’s economy unexpectedly shrank by 0.1% in October, the first monthly decline since February, partly because of a U.S. auto strike that hit manufacturing, Statistics Canada data indicated on Monday.

Analysts in a Reuters poll had forecast a gain of 0.1% following a 0.1% advance in September. Goods-producing industries posted a 0.5% loss while service sectors were essentially unchanged.

October’s growth figures were the latest in a string of disappointing data that analysts say could put pressure on the Bank of Canada to mull a rate cut.

“Today’s report may be seem easy to dismiss on its face given the strike-related disruption was well known in advance, but moving past that impact reveals some concerning weaknesses,” said Brian DePratto, a director at TD Economics.

“Don’t write off monetary easing in 2020 just yet.”

The central bank has held its key rate unchanged since October 2018 even as several of its counterparts, including the U.S. Federal Reserve, have eased. In October it forecast fourth quarter annualized Canadian growth would be 1.3% but analysts now say that is likely to be too optimistic.

“Because some of the softness is likely temporary, we look for growth to snap back above 2% in the first quarter of 2020,” said Robert Kavcic, senior economist at BMO Capital Markets.

The manufacturing sector contracted by 1.4%, the fourth decline in five months. Durable manufacturing dropped by 2.3% as a strike by the United Auto Workers prompted some Canadian plants and parts producers to scale back production.

The Bank of Canada’s next fixed rate announcement date is Jan 22 and market expectations, as reflected in the overnight index swaps markets, show operators expect it to stay put.

Statscan said retail trade in October fell by 1.1%, the largest decline since March 2016, on broad-based weakness. Transportation and warehousing rose by 0.6% on strength in the aviation sector, both in passengers and cargo.

“Although the Canadian economy is going through a soft patch in the fourth quarter, some of it is due to temporary disruptions that should be reversed early next year,” said Paul Ashworth, chief North American economist at Capital Economics.

(Reporting by David Ljunggren; Editing by Andrew Heavens and Alistair Bell)

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Pandemic Binge Helped Turkish Economy Outperform Most Peers – BNN

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(Bloomberg) — Turkey’s economy outperformed all but one major competitor in the final quarter, as rate cuts and a spending-and-credit binge beat back pandemic restrictions even as the lira collapsed.

Gross domestic product rose 5.9% from a year earlier, more than all G-20 nations except China. The median of 20 forecasts in a Bloomberg survey was for 6.9% growth. The seasonally and working day-adjusted figures showed an expansion of 1.7% in the last quarter from the previous three months. The economy grew 1.8% in 2020.

The growth push weakened the currency by 20% in 2020 and kept headline inflation in double digits for the entire year. The data expose the challenge facing central bank Governor Naci Agbal as he looks to cool growth and restore price stability without triggering a steep slowdown in activity and a jump in unemployment.

The government had pushed banks to ramp up lending to help businesses and consumers ride out the Covid emergency. The credit boom was coupled with a front-loaded easing cycle that helped prime the economy.

Agbal raised the benchmark interest rate by a cumulative 675 basis points to 17% following his appointment in November, signaling a return to more market-friendly monetary policy. The lira has strengthened 15% since his appointment.

The International Monetary Fund raised its growth forecast for Turkey’s economy to 6% in 2021 amid the coronavirus vaccine rollout, while warning the pandemic response worsened pre-existing financial risks despite leading to a strong rebound in economic activity.

“With some stability in the currency market, Turkish exporters can finally enjoy the price competitiveness accumulated over recent years,” said JPMorgan Chase & Co.’s London-based analyst Yarkin Cebeci. “Depending on the pace of vaccinations, tourism will most probably be stronger than last year as well.”

©2021 Bloomberg L.P.

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Pandemic Binge Helped Turkish Economy Outperform Most Peers – Bloomberg

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Turkey’s economy outperformed all but one major competitor in the final quarter, as rate cuts and a spending-and-credit binge beat back pandemic restrictions even as the lira collapsed.

Gross domestic product rose 5.9% from a year earlier, more than all G-20 nations except China. The median of 20 forecasts in a Bloomberg survey was for 6.9% growth. The seasonally and working day-adjusted figures showed an expansion of 1.7% in the last quarter from the previous three months. The economy grew 1.8% in 2020.

The growth push weakened the currency by 20% in 2020 and kept headline inflation in double digits for the entire year. The data expose the challenge facing central bank Governor Naci Agbal as he looks to cool growth and restore price stability without triggering a steep slowdown in activity and a jump in unemployment.

The government had pushed banks to ramp up lending to help businesses and consumers ride out the Covid emergency. The credit boom was coupled with a front-loaded easing cycle that helped prime the economy.

#lazy-img-368962288:beforepadding-top:56.25%;Turkey's industrial output has been rising on an annual basis since June

Agbal raised the benchmark interest rate by a cumulative 675 basis points to 17% following his appointment in November, signaling a return to more market-friendly monetary policy. The lira has strengthened 15% since his appointment.

The International Monetary Fund raised its growth forecast for Turkey’s economy to 6% in 2021 amid the coronavirus vaccine rollout, while warning the pandemic response worsened pre-existing financial risks despite leading to a strong rebound in economic activity.

“With some stability in the currency market, Turkish exporters can finally enjoy the price competitiveness accumulated over recent years,” said JPMorgan Chase & Co.’s London-based analyst Yarkin Cebeci. “Depending on the pace of vaccinations, tourism will most probably be stronger than last year as well.”

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    Spinning waste into gold: Victoria, Nanaimo councillors call for 'circular economy' strategy – Times Colonist

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    When people talk about a circular economy in which materials get reused and less waste ends up in landfills, they’re really ­talking about entrepreneurs such as ­Meaghan McDonald.

    The 31-year-old Victoria woman has launched a new venture that aims to make money and protect the environment at the same time.

    article continues below

    Her brand, Salt Legacy, plans to give new life to discarded or “dead” sails from sailboats by using the durable, water- and sun-resistant materials to make backpacks, surfboard bags and other outdoor gear rather than burying all that nylon and polyester underground.

    “I’ve always been really eco-conscious and always wanted to create something that would kind of help within the circular economy,” McDonald said.

    She has a background in biology rather than business, so she got help from an eight-month incubator program run by Victoria’s Project Zero — a partnership between the non-profit Synergy Foundation and Vancity that assists start-up businesses looking to operate in a circular economy.

    Project Zero envisions a Vancouver Island where, by 2040, “our waste will be our greatest resource” and hundreds of people will be working for small independent businesses that, like McDonald, will be “upcycling” materials into new products.

    Municipal politicians are getting on board.

    Victoria Coun. Jeremy Loveday describes the circular economy as an immense opportunity “to create good green jobs and live on this planet in a way that will actually be sustainable.”

    That’s why he got Victoria council to endorse a resolution to the Union of B.C. Municipalities, calling on the provincial government to develop a circular-economy strategy.

    Loveday said such a strategy would allow the province to encourage and mandate that governments, businesses and residents adopt circular-economy practices.

    “And, I think, local governments are at the heart of it because cities are where the population, carbon emissions, waste and innovation are all occurring.”

    His motion, which emerged from the Climate Caucus, a non-partisan network of more than 300 elected officials across Canada, received final approval from Victoria council on Thursday.

    In a related move, council also backed Loveday’s resolution to the UBCM asking the province to adopt right-to-repair legislation, which would ensure citizens have access to the parts and information they need to fix items, rather than being discouraged by ­companies that claim ownership over the ­intellectual property of their ­products.

    “The idea, essentially, is that it’s time for the era of planned ­obsolescence to be over, and that consumers should have the right to receive information about their products, have access to spare parts, and that we should be able to repair the things that we purchase, rather than having a product that is designed to have an end of life,” Loveday said.

    Nanaimo Coun. Ben Geselbracht won approval from his council for similar motions last week, as well as a third resolution calling for a provincial strategy to deal with demolition and construction waste.

    Geselbracht said that the more municipal councils sign on to the resolutions, the stronger the case for them receiving serious ­consideration at the next UBCM ­convention.

    “Then, hopefully, when it gets passed to the minister, there’s a pretty clear mandate that this is an important issue and we really demand action on it.”

    As for McDonald, she’s forging ahead with her business plans and collecting old sails from marinas and sailing clubs that are only too happy to donate materials destined for the landfill.

    She has the prototype for her backpack complete, work is underway on a fanny pack and a surfboard bag is in the design stage.

    McDonald is also gathering the history of each discarded sail, so that she can attach stories of adventure and world travel to her new products.

    “Then the new consumer can kind of have a bit of that history and that connection piece to the backpack they just bought,” she said.

    In that way, her products will keep stories circulating as well as the economy.

    lkines@timescolonist.com

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