Paul Martin’s Business Update – February 20th, 2015
What goes around comes around.
The old adage that history repeats itself is the key theme of the latest issue of SaskTrends Monitor, the province’s leading economic journal. In its most recent edition, the editor reflected on the recent decline in oil prices and compared it to the last time we saw a big commodity price drop – 2009 – to see if we could draw some parallels.
The similarities are quite striking and beg the question…is what happened five years ago repeating itself?
If it is, and the publication thinks there are significant similarities, then we should expect oil prices to regain about half their losses by the end of this year and return to what we would consider normal prices in 24 months.
Back in 2009 – when we had the banking crisis in the US – a few things were different. First, the US economy was sputtering and China was strong. Now it’s the other way around as America, our biggest market, is firing on all cylinders. And in 2010, Saskatchewan rebounded quickly as employment remained strong and so did investment.