Consumer confidence on upswing, sys EDC economist.

• Author: Migneault, Jonathan
• Position: NEWS

Canada is on the verge of experiencing increased economic growth, and Sudbury's mining sector could benefit, according to Peter Hall, chief economist with Export Development Canada.

"What we're seeing at the moment is a world economy that is coming back to growth," Hall said during a presentation to Sudbury business leaders, May 1.

Hall said Export Development Canada expects four factors to contribute to growth in the Canadian and world economies.

The first is the rise of leading indicators, such as the housing market, stock market activity and purchases of durable goods.

Hall said most key indicators have returned to normal growth levels that were prevalent before the 2008 recession.

The second factor, he said, is significant pent-up consumer demand in Canada and around the world. Buyers have delayed making large purchases, such as cars and homes, over the past five years, but there are signs consumer spending is on the rise.

That has translated to Hall's third contributing factor to increased economic activity: the return of consumer confidence for the first time in five years.

Consumer confidence has returned to normal pre-2008 levels in the United States, he said, which benefits exporters in Canada.

The final factor. Hall said, is the end of government austerity programs that have stifled economic growth.

Even the European economies hardest hit during the recession--such as Spain, Greece and Ireland--have started to eliminate their deficits, he said.

But global economic growth will come at the expense of base metal prices, said Hall, which is set to remain around their current lower levels when compared to the highs from 2005 to 2008.

To help stimulate the economy, central banks first cut interest rates, encouraging people to spend and indirectly stimulating the economy. But there comes a point when rates can go no lower.

When this happens, as it did during the economic downturn, several of the world's central banks, including in the U.S., began to pump money directly into the economy by buying assets--including government bonds and base metals--using money created for that purpose.

The supply of new money means banks...