Thursday, September 18, 2014

Ontario's Economy to Grow Faster Than Canada's?

There's an article on titled "Ontario economy poised to grow faster than Canada's: CIBC". I'm skeptical. Note that it is next year:

"CIBC says Canada's most populous province is on track to see its economy expand by more than the national average next year, the first time that's happened since before the recession.

The bank says Ontario's economy could expand by 2.8 per cent next year. That's slightly ahead of the 2.7 per cent expansion the bank expects for Canada's economy as a whole."

The reason according to the article is strong US growth. I'm skeptical for two reasons. First I'm not convinced that US growth in 2015 will be that great. Second with Ontario's conversion from a manufacturing economy to a low paying service economy, I'm not sure strong US growth has much of an effect on Ontario GDP like it used to. Ontario car manufacturing has been decimated so stronger US demand for cars doesn't have the effect in this province it once did.

Predictions of 2.8% growth in Ontario in 2015 I suppose could happen but my advice is don't bank on it. Just to keep track, the predictors were Avery Shenfield and Warren Lovely from CIBC.

I'm still waiting for the first quarter GDP numbers from the province for this year, so it will be quite some time before we know the full 2015 numbers for Ontario.

No comments:

Post a Comment