TORONTO, Dec. 12, 2013 /CNW/ - Stronger demand for exports and an
expected resumption of the manufacturing sector's recovery will boost
economic expansion in Ontario in the next two years, according to the
latest RBC Economics Provincial Outlook issued today. RBC expects real GDP growth to come in at 1.3 per cent in
2013, 2.6 per cent in 2014 and 2.9 per cent in 2015.
"The recovery that was taking place in Ontario's manufacturing sector
since 2010 effectively stalled in 2013, with notable setbacks in the
motor vehicle industry," said Craig Wright, senior vice-president and
chief economist, RBC. "Production fell nearly 7.0 per cent
year-over-year in the first 11 months of 2013 after averaging increases
of nearly 20 per cent annually for the last three years."
Service-producing industries, on the other hand, made notable advances,
particularly in financial services, transportation, professional
services, accommodation and food services, and education, RBC said.
Further, RBC notes that overall, Ontario experienced respectable growth
in services notwithstanding continued tighter fiscal restraint that
kept public administration services on a downward course.
"Going forward, we expect the U.S. economy to speed up its recovery,
which will undoubtedly bode well for Ontario's exports," said Wright.
"We expect growth for the province to clock in at 2.6 per cent in 2014,
the strongest pace in four years."
RBC sees scope for pick up in motor vehicles and parts; however, rising
demand for other Ontario-made products and services - such as
machinery, pharmaceuticals, natural resources, financial services and
engineering - should provide a large part of the lift to exports.
RBC says Ontario businesses will redouble their efforts in becoming more
productive and globally competitive by boosting capital investment. On
the consumer side, RBC expects an improving job market and a downward
trending unemployment rate will boost incomes and confidence, and
thereby support spending.
The Provincial Outlook report indicates that some softening is
anticipated on the housing construction front. The substantial slowing
of pre-construction new condo sales in the Greater Toronto Area since
early 2012 will likely dampen housing starts in the province in the
The RBC Economics Provincial Outlook assesses the provinces according to
economic growth, employment growth, unemployment rates, retail sales,
housing starts and consumer price indices. The full report and
provincial details are available online as of 8 a.m. ET today at rbc.com/economics/economic-reports/provincial-economic-forecasts.html.
For further information:
Craig Wright, RBC Economics Research, 416 974-7457
Robert Hogue, RBC Economics Research, 416 974-6192
Elyse Lalonde, Communications, RBC Capital Markets, 416 842-5635