Tuesday, March 31, 2009

GDP back to 2007 level

It just took 4 months to completely wipe out the 'growth' of last 2 years. January's GDP fell by an annualized 8.4%, taking the total GDP back to the levels last seen in 2006.

Is it possible that we'll undo the growth of the last 7 or 8 years of the debt fueled bubble before this is all over? I wouldn't rule that out?

In other news from closer home, the drilling industry is talking about utilization at levels last seen in the 1980s.
"It's similar to the downturn that we saw in the '80s," said Joe Bruce, chief operating officer at Nabors Canada, one of the biggest drillers in the country. Because of its position in the industry, Nabors expects to run 15 per cent of its fleet during breakup. It is currently at 21 per cent."

"Another conundrum concerns manpower: Faced with the traditional slack spring season, companies must decide how many workers will receive the traditional $140-a-day subsistence pay during annual training. It's a calculation that requires looking into the gloomy future and paring down staff levels to the bare minimum needed."

Wage deflation anyone? High unemployment?
If we are unwinding the excesses of last 8 to 10 years in virtually every domain, how will Alberta's residential and commercial real estate be any different? The bulls will get a chance to make their case in the comments, as usual.

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