The economic research division of mortgage lender RBC forecasts improvement in Canada’s economy for the second half of this year. The RBC Economic and Financial Market Outlook projects real GDP growth of 1.6 per cent for this year and 2.6 per cent in 2016. The report highlights the weakness in the energy sector with continuing low rates of investment; and also the auto sector retooling hitting the manufacturing sector.

However there are better things ahead: "Our outlook for Canada's economy reflects a positive read on expectations for consumption and housing, and the notion that a strengthening U.S. economy and a more competitive domestic currency will fuel increased demand for Canadian exports," said Craig Wright, senior vice-president and chief economist, RBC.

The report also suggests that the worst effects of the oil downturn on housing markets may have already taken place with the latest data suggesting some improvement: "Another rise in average home prices should put some pressure on affordability, though it will be tempered by historically low rates," said Wright. "In 2016, a combination of price increases and rising rates will put more stress on affordability levels and re-sale activity will begin to soften."

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