Mixed News for 2 US Trading Partners

As the effects of the Great Recession linger, they weigh differently in different parts of the developed world.

In Canada, the Canadian Conference Board recently issued a report forecasting that western Canada would lead that country’s economy out of its slowdown (which has been much milder than in the US):

Although the list of top-performing cities zigzags across the country, [said Mario Lefebvre, director of the conference board’s Centre for Municipal Studies,] the West is emerging as the regional leader when it comes to financial recovery.

Calgary is following a steady upward trajectory, with its energy sector expected to boost its economic growth by 3.7 per cent in 2011 and above 4 per cent by 2012.

Vancouver, Edmonton Winnipeg are all expected to have strong years, benefiting respectively from the afterglow of the Winter Olympics, rising oil prices and a rallying manufacturing sector.

Mr. Lefebvre said he expects western cities to remain on top for the foreseeable future, their success fuelled by the growing demand for commodities in India and China compared with the slower rebound in manufacturing, a predominant industry in the East.

You can read more here.

Meanwhile New York Times columnist David Leonhardt reports that, in Germany, the “miracle” of German austerity is giving way to the inexorable math of Keynsian economics:

Germany’s economic growth surged in the middle of last year, causing commentators both there and here to proclaim that American stimulus had failed and German austerity had worked. Germany’s announced budget cuts, the commentators said, had given private companies enough confidence in the government to begin spending their own money again.

Well, it turns out the German boom didn’t last long. With its modest stimulus winding down, Germany’s growth slowed sharply late last year, and its economic output still has not recovered to its prerecession peak. Output in the United States — where the stimulus program has been bigger and longer lasting — has recovered. This country would now need to suffer through a double-dip recession for its gross domestic product to be in the same condition as Germany’s.

You can read the full story here.

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