At the risk of sounding like Zerohedge.com and their fascination with winter weather and US GDP, I'm wondering about the effects of the record cold this winter in Ontario will have on first quarter GDP. Last year we had a similarly cold winter and ended up with a weak first quarter GDP number of 0.6% (annualized). Ontario's population growth has been around 1.1% lately so that means that per capita GDP actually declined.
GDP in 2014 did bounce back considerably to 4.0% in Q2 and 3.2% in Q3 (again annualized) which is excellent by Ontario standards in the past ten years. US GDP growth in the first quarter of 2014 was weak at -2.1% which no doubt affected the Ontario economy, although maybe the weather did too.
This year January was probably worse than average weather wise and February has certainly been colder than average and with the Great Lakes mostly frozen over, March could be colder than average too. Is that enough to have an effect on Ontario's GDP number? Less people will be going out with the cold and that could effect bars and restaurants, although that's not that big a part of the economy.
US growth is obviously a more important factor. The latest prediction of US first quarter growth is 2.7%, which is considerably more than the -2.1% of last year, so that should have a positive effect on Ontario growth (although the US prediction has declined somewhat of late). Ontario's January employment numbers were just meh with only a few thousand jobs created so the quarter isn't starting out with a band. Could the cold affect the February numbers? Hiring decisions could be pushed back by the cold.
RBC has predicted in this PDF, that Ontario's GDP growth would be a healthy 3.1% in 2015. I'm skeptical and a weak first quarter could make that number hard to achieve.
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