Wednesday, April 29, 2015

US First Quarter 2015 GDP Disappoints at 0.2%, Portent for Ontario? Comparison Between 2014 US and Ontario Quarterly GDP Growth

Some had been predicting the weak US GDP growth number of 0.2% (like the Atlanta Fed GDP Model) although at the start of the year predictions were considerably more rosy. Note this is the earliest estimate for US GDP.

What does this mean for Ontario's GDP for the first quarter of 2015? In 2014 first quarter GDP growth in Ontario was 0.6%, 3.2% in the second, 4.0% in the third and 2.5% in the fourth (all annualized).

For comparison in the US for 2014, first quarter growth was -2.1%, second quarter growth was 4.6%, third quarter  5.0% and 2.2% in the fourth quarter. Obviously there is a large amount of correlation there although the US decreased quite massively in the first quarter of 2014 while in Ontario, growth was only weak. Nonetheless the US first quarter of 2015 GDP of 0.2% isn't a good number for Ontario which depends on the US to a much greater extent for exports than other Canadian provinces.

Expect an Ontario number below 2.0% annualized at the least.

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