Personal bankruptcies have fallen to the lowest level in seven years, cushioned by a strong labour market, Canadian Imperial Bank of Commerce said Monday.
Bankruptcies, on average over the past three months, fell 7.6 per cent from last year but – like most economic reports of late – the headline number masked regional discrepancies. In Alberta, they tumbled 17.5 per cent, while bankruptcies in Quebec and Atlantic Canada rose 3.6 per cent and 1.8 per cent, respectively, CIBC said in its bankruptcy report.
At the same time, Ontario bankruptcies are falling as strength in Ottawa, Toronto and Kitchener offsets higher rates in Sudbury and Windsor, cities more vulnerable to the strong Canadian dollar.
“Looking at development in the pipelines, it appears that there is little risk of any significant deterioration in the bankruptcy situation in the near future,” CIBC economist Benjamin Tal said in the report.
In one barometer that shows fewer people are likely going belly up, the delinquency rate in credit cards has stabilized at about 4.6 per cent — lower than its long-term average. Mortgage arrears, meantime, remain well below their long-term average and are “unlikely to rise strongly in the near future,” the report said.
CIBC forecasts little change in the number of bankruptcies this year and a 3 per cent-5 per cent increase next year as economic activity weakens.
Business bankruptcies, meantime, have fallen more than 18 per cent, on average over the past three months, from last year — a rate not seen since late 2002.
The largest decline in business bankruptcies was in Alberta where the number of bankruptcy filings plunged by almost 40 per cent during the year ending April.
Ontario was the only province that saw an increase in the number of business bankruptcies in the period, weighed down by difficulties in the manufacturing sector.
The number of business bankruptcies is expected to fall by 7 or 8 per cent this year be little changed in 2007, CIBC said.
“At the same time, we expect the regional divergence to widen with bankruptcies in the manufacturing sector in Ontario and Quebec continuing to rise, reflecting the impact of a strong dollar and some softening in demand from south of the border.”
Bankruptcies, on average over the past three months, fell 7.6 per cent from last year but – like most economic reports of late – the headline number masked regional discrepancies. In Alberta, they tumbled 17.5 per cent, while bankruptcies in Quebec and Atlantic Canada rose 3.6 per cent and 1.8 per cent, respectively, CIBC said in its bankruptcy report.
At the same time, Ontario bankruptcies are falling as strength in Ottawa, Toronto and Kitchener offsets higher rates in Sudbury and Windsor, cities more vulnerable to the strong Canadian dollar.
“Looking at development in the pipelines, it appears that there is little risk of any significant deterioration in the bankruptcy situation in the near future,” CIBC economist Benjamin Tal said in the report.
In one barometer that shows fewer people are likely going belly up, the delinquency rate in credit cards has stabilized at about 4.6 per cent — lower than its long-term average. Mortgage arrears, meantime, remain well below their long-term average and are “unlikely to rise strongly in the near future,” the report said.
CIBC forecasts little change in the number of bankruptcies this year and a 3 per cent-5 per cent increase next year as economic activity weakens.
Business bankruptcies, meantime, have fallen more than 18 per cent, on average over the past three months, from last year — a rate not seen since late 2002.
The largest decline in business bankruptcies was in Alberta where the number of bankruptcy filings plunged by almost 40 per cent during the year ending April.
Ontario was the only province that saw an increase in the number of business bankruptcies in the period, weighed down by difficulties in the manufacturing sector.
The number of business bankruptcies is expected to fall by 7 or 8 per cent this year be little changed in 2007, CIBC said.
“At the same time, we expect the regional divergence to widen with bankruptcies in the manufacturing sector in Ontario and Quebec continuing to rise, reflecting the impact of a strong dollar and some softening in demand from south of the border.”
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