Saturday, February 1, 2014

Canada's November GDP Growth 0.2%, What will December's Numbers be for Ontario?

Canada reported 0.2% GDP growth in November according to this Financial Post article. What I found most interesting from the article was this:

"The overall increase in gross domestic product was in line with forecasts, while still below the previous month’s pace of 0.3%.

“The three-month trend in growth is now running at a nifty 3.8% annualized clip,” said Douglas Porter, chief economist at BMO Capital Markets.

“However, we look for a setback in next month’s report, as the brutal December weather — notably the ice storm in Ontario — is expected to produce a GDP decline for that month.”"

If GDP growth for December is negative for the country because of the ice storm, how bad will it be for Ontario? We've already seen 39,000 jobs lost in Ontario in December, so we can assume it will be quite poor and hence the overall fourth quarter numbers will be poor. One bright spot could be that hiring was suppressed in Ontario in December and will bounce back strongly in January. Those numbers should be out soon.

Canada's overall GDP growth was 2.7% in the third quarter of 2013, compared to 2.3% for Ontario (from the Ontario Finance Ministry's website, released in January 2014):

"Ontario’s real Gross Domestic Product (GDP) increased 0.6% (2.3% annualized) in the third quarter of 2013."

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