Ontario & Quebec economic growth forecasts for 2012
By Linda Plater | September 14, 2011
New jobs in both Ontario and Quebec will help bolster the economies of Canada's two most populous provinces.
Bump in the Road for Ontario's Auto Industry
Often referred to as the barometer of Ontario's economic health, the auto industry has hit a bump in the road. Largely due to Japanese supply chain challenges resulting from the tsunami and earthquake, Ontario is facing a slight downturn in its economy.
Even though the car and truck output in the province plummeted by 14 per cent in the second quarter relative to a year ago, Ontario is projected to grow at a rate of 2.3 per cent in 2011 and 2.4 per cent in 2012.
Despite the lagging auto industry, Ontario's job market is showing steady gains.
85,000 new jobs were created so far this year. Unemployment fell by 0.6 percentage points to 7.5 per cent in August.
While these improvements have not strengthened retail spending, they may have positively influenced spending in the Ontario housing market.
Quebec Exports Key to Growth
Quebec's weaker than expected export markets have reduced the province's GDP outlook to 1.7 per cent in 2011 and 2.1 per cent in 2012.
Nevertheless, RBC economists expect Quebec's economy to pick up later this year due to improvements at home and in the U.S. economy. A re-invigorated demand for Quebec's exports, and a steady improvement in the province's job market could also stimulate consumer demand.
More than to 16,000 new jobs were created in the first eight months of this year contributing to a steady decline in the province's unemployment rate, which in July fell to its lowest point (7.2 per cent) in almost three years before rising modestly to 7.6 per cent in August.
And new jobs could tally 60,000 by year's end. Higher capital spending and higher investment in non-residential structures and equipment by both the private and public sectors are set to generate substantial construction activity outside the residential sector.
Canadian economy: national & provincial economic forecasts
Despite economic uncertainty worldwide, Canada's outlook for 2012 looks postive
Western Canada Economic Growth Forecasts
Ontario & Quebec Economic Growth Forecasts
Atlantic Canada Economic Growth Forecasts
RBC Economic and Financial Market Outlook. View the full study: http://www.rbc.com/newsroom/pdf/fcst-09-2011.pdf
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