TORONTO, June 9, 2011 /CNW/ - Ontario's real GDP is expected to increase
by 3.3 per cent this year, marking the province's highest growth rate
since 2000, according to the latest Provincial Economic Outlook report
released today by RBC Economics. Ontario's economy will move beyond
full recovery, as significant recession losses will be entirely
recouped by the middle of this year, opening the gate to the
long-sought after economic expansion phase.
Ontario's economic growth in the fourth quarter of 2010 came in at a
rate of 3.8 per cent, the second fastest rate that the province has
produced in almost four years. RBC notes that a number of positive
economic indicators point to an even faster pace of growth in the first
quarter of this year. In particular, Ontario has made impressive
employment gains so far this year, accounting for 60 per cent of all
jobs created in the country.
"The improving job prospects in Ontario have provided support to
consumer spending and, more importantly, the housing market, where we
have seen further increases in home resales and construction this
winter," said Craig Wright, senior vice-president and chief economist,
RBC. "Housing starts have held up much better than we anticipated,
which prompted us to upgrade our call on them for the entire year."
The RBC report notes that although Ontario's car and truck output is up
more than 20 per cent this quarter relative to a year ago, the auto
industry has been adversely effected by Japan's earthquake and tsunami
that occurred in March.
"A number of assembly plants in the province have been affected by
disruptions to supply-chains caused by this natural disaster," noted
Wright. "We believe that these disruptions will be temporary, but they
will nonetheless dampen activity in the industry in the second quarter
of this year."
Looking ahead to 2012, RBC expects the U.S. economy to hit its stride,
with growth of 3.4 per cent spurring demand for Ontario products and
providing significant offset to any weakness in provincial capital
spending. The forecast for real GDP growth in Ontario remains solid at
3.1 per cent next year.
The RBC Economics Provincial Outlook assesses the provinces according to economic growth, employment growth,
unemployment rates, retail sales, housing starts and consumer price
The full report and provincial details are available online as of 8 a.m.
ET today at www.rbc.com/economics/market/pdf/provfcst.pdf.
For further information:
Craig Wright, RBC Economics Research, (416) 974-7457
Robert Hogue, RBC Economics Research, (416) 974-6192
Elyse Lalonde, RBC Media Relations, (416) 974-8810