Statscan just announced that Canadian GDP rose 2.4% (annualized) where 2.0% was expected. For comparison Statscan says US growth was 2.2%. Inventories were a big contributor (which could be a drag in Q1). For all of 2014, the increase was a relatively strong 2.5%. Third quarter growth was 3.2%.
Exports were actually down 0.4%, well exports of goods were down 0.6% which probably isn't good for Ontario especially this from the Statscan report:
"Exports of motor vehicles and parts (-3.5%) and energy products (-1.3%) were notably lower. Metal and non-metallic mineral products grew 5.4%."
Interesting with the current developments that car related exports were down even more than energy products.
Savings were down in 2014:
"Household disposable income (in current dollars) grew 3.4%, the slowest
pace in five years. As a result, the household saving rate declined
from 5.2% in 2013 to 4.0% in 2014."
One wonders how much longer Canadians can continue to pay more for housing.
For Ontario overall, considering the fact car exports were down more than energy products, it is possible that Ontario's GDP could come under the national 2.4%. Employment numbers certainly weren't impressive in the fourth quarter. However as mentioned, inventories were way up, so who knows. Ontario's first quarter growth could be poor.
Showing posts with label third quarter. Show all posts
Showing posts with label third quarter. Show all posts
Tuesday, March 3, 2015
Monday, February 2, 2015
2014 Ontario GDP Growth, Second and Third Quarters
I've been meaning to blog about Ontario's second and third quarter GDP growth. The third quarter 2014 numbers were released in January at the Ontario's Finance ministry's site here.
Third quarter GDP was actually quite good:
"Ontario’s real Gross Domestic Product (GDP) increased 1.0% (4.0% annualized) in the third quarter of 2014, following a 0.8% (3.2% annualized) advance in the second quarter. The strong third-quarter gain was led by higher household and business spending, along with robust export growth."
Note that the first quarter number was considerably less:
"Real GDP grew by 0.1 per cent (0.6 per cent annualized) in the first quarter of 2014."
So with the three together, that's approximately 2.6% which is impressive by recent Ontario standards of GDP growth. So with any decent growth in the fourth quarter the 2014 GDP number should be over 2%. That's not particularly impressive, but compared to the string of 2% GDP growth numbers the province has been posting the past couple of years, that's something.
However the fourth quarter numbers don't look like they are shaping up that great as made clear in this Financial Post article titled "Canada’s slumping GDP reveals troubles in just about every sector"
From the article it isn't just oil:
"Friday’s GDP report made crystal clear how grimly Canada’s economy — one that contracted 0.2% in November – had been quietly tanking, which contributed to the Bank of Canada’s surprise move last week when it cut its prime setting rate.
While the bleak oil picture was fully developing, the thinking was that Canadians shouldn’t worry about the economy, manufacturing would carry the standard. However, manufacturing output, which accounts for 10.5% of GDP, fell even further than the energy sector, declining 1.9%, even though the Canadian dollar had already begun sliding, according to Statistics Canada."
So if manufacturing is tanking even more than oil, that can't be good for Ontario's fourth quarter of 2014 GDP number. Other industries crucial to Ontario also aren't doing well:
"Concurrently, wholesale trade slumped 0.6% in November, a second consecutive decline following a decrease of 0.2% in October, coupled with a surprising drop in output of 0.4% in the finance and insurance sector, which had previously risen for five consecutive months."
Certainly the Canadian dollar tanking versus the US dollar can help manufacturing, but it takes time to adjust. The fourth quarter GDP number should be interesting to Ontario and considering that a small number of jobs were actually lost in November and December in Ontario, there's not a lot of good signs. Could the fourth quarter numbers even be negative?
The first quarter number for 2015 isn't looking great either. We'll know more when the January employment numbers come out.
Third quarter GDP was actually quite good:
"Ontario’s real Gross Domestic Product (GDP) increased 1.0% (4.0% annualized) in the third quarter of 2014, following a 0.8% (3.2% annualized) advance in the second quarter. The strong third-quarter gain was led by higher household and business spending, along with robust export growth."
Note that the first quarter number was considerably less:
"Real GDP grew by 0.1 per cent (0.6 per cent annualized) in the first quarter of 2014."
So with the three together, that's approximately 2.6% which is impressive by recent Ontario standards of GDP growth. So with any decent growth in the fourth quarter the 2014 GDP number should be over 2%. That's not particularly impressive, but compared to the string of 2% GDP growth numbers the province has been posting the past couple of years, that's something.
However the fourth quarter numbers don't look like they are shaping up that great as made clear in this Financial Post article titled "Canada’s slumping GDP reveals troubles in just about every sector"
From the article it isn't just oil:
"Friday’s GDP report made crystal clear how grimly Canada’s economy — one that contracted 0.2% in November – had been quietly tanking, which contributed to the Bank of Canada’s surprise move last week when it cut its prime setting rate.
While the bleak oil picture was fully developing, the thinking was that Canadians shouldn’t worry about the economy, manufacturing would carry the standard. However, manufacturing output, which accounts for 10.5% of GDP, fell even further than the energy sector, declining 1.9%, even though the Canadian dollar had already begun sliding, according to Statistics Canada."
So if manufacturing is tanking even more than oil, that can't be good for Ontario's fourth quarter of 2014 GDP number. Other industries crucial to Ontario also aren't doing well:
"Concurrently, wholesale trade slumped 0.6% in November, a second consecutive decline following a decrease of 0.2% in October, coupled with a surprising drop in output of 0.4% in the finance and insurance sector, which had previously risen for five consecutive months."
Certainly the Canadian dollar tanking versus the US dollar can help manufacturing, but it takes time to adjust. The fourth quarter GDP number should be interesting to Ontario and considering that a small number of jobs were actually lost in November and December in Ontario, there's not a lot of good signs. Could the fourth quarter numbers even be negative?
The first quarter number for 2015 isn't looking great either. We'll know more when the January employment numbers come out.
Monday, October 13, 2014
Canadai's GDP Growth in July: Zero. What Does tt Mean to Ontario?
This National Post article has the news that Canada's GDP growth was zero in July:
"The flat reading in gross domestic product was the weakest performance since December 2013, when the economy fell by 0.4%, Statistics Canada said Tuesday. Economists had expected GDP to expand by 0.2% in July.
The economy grew by a modest 0.3% in June and by 0.5% in May. On a quarterly basis, the economy posted gains of 0.9% between January and March and 3.1% in the second three-month period. Many forecasters had been looking for growth of 3% or slightly lower in the third quarter."
What's interesting for Ontario for the first quarter is that Quebec reported a strangely high 2.3% number, while one would assume that Alberta and Saskatchewan would report higher numbers than 0.9% just based on population growth alone. Ontario hasn't reported its GDP number for the first quarter yet, but some province has to be below the 0.9% number and dragging it down. This part of the article would suggest that manufacturing and auto manufacturing isn't going to do too much for Ontario's economy in the second half of the year:
"On Tuesday, Statistics Canada said the manufacturing sector, which has struggled to gain momentum, advanced by 1% in July, supported by increases in transportation equipment, computer and electronics products. Construction, professional services and retail trade also showed slight increases during the month.
“We still have concerns about the manufacturing sector. Admittedly, production increased in July, but growth has been bolstered in recent months by a weather-related rebound in the auto sector,” said David Madani, Canadian economist for Capital Economics.
“Given the lack of investment in this large sector and increasingly intense competition from the southern U.S. and Mexico, Canadian auto production won’t be a positive force over the second half of the year.”"
This is an important issue for Ontario. Even with car sales picking up in the US, Ontario doesn't make nearly as many cars as before the recession of 2008. Ontario won't benefit as much.
With regards to GDP in the third quarter:
"In its last quarterly Monetary Policy Report, released in July, the Bank of Canada predicted a third-quarter advance in GDP of 2.3%, followed by 2.4% growth in the final quarter. The bank will publish its next MPR on Oct. 22."
That seems high to me, especially with all the events currently going on, although the Canadian dollar continuing to tank certainly should aid the Canadian and Ontario GDP numbers a bit. Note that the Ontario Finance Ministry is predicted Ontario's 2014 GDP to come in at 2.1%.
The Financial Post has this article on the August trade numbers for Canada, which adds some context for third quarter GDP predictions:
"August was expected to be another healthy month for exports — coming after a $2.2-billion surplus in the previous month. Instead, the value of goods and services delivered to global markets fell into the red by the tune of $610-million, as exports declined 2.5% and imports rose 3.9%.
Forecasters had called for a surplus of $1.6-billion in August — following the July tally, which Statistics Canada on Friday revised slightly downward from its previous estimate of $2.58-billion."
Obviously exports tanking isn't good for GDP and one has to think that the August numbers will end up hurting the third quarter GDP numbers for both Canada and Ontario. The composition of the export drop (autos) is a problem for Ontario:
"In Friday’s report, Statistics Canada said the value of exports fell by $44.2-billion in August, led by declines in shipments of vehicles and auto parts, as well as energy products. Imports, meanwhile, rose by $44.8-billion during the month."
So where do we end up for third quarter GDP for Canada and Ontario?
"However, David Madani, at Capital Economics, said “the fact that most export categories showed small declines, or flat growth, was a bit disconcerting.”
“This supports our view that, after stalling in July, GDP probably only grew modestly in August,” he said.
“This is further evidence that the consensus estimate for third-quarter growth of 3% is too high,” with Capital forecasting 2.4% annualized growth between July and September."
I'm still hoping for Ontario to release the first quarter GDP number. It would provide a lot of clarity.
"The flat reading in gross domestic product was the weakest performance since December 2013, when the economy fell by 0.4%, Statistics Canada said Tuesday. Economists had expected GDP to expand by 0.2% in July.
The economy grew by a modest 0.3% in June and by 0.5% in May. On a quarterly basis, the economy posted gains of 0.9% between January and March and 3.1% in the second three-month period. Many forecasters had been looking for growth of 3% or slightly lower in the third quarter."
What's interesting for Ontario for the first quarter is that Quebec reported a strangely high 2.3% number, while one would assume that Alberta and Saskatchewan would report higher numbers than 0.9% just based on population growth alone. Ontario hasn't reported its GDP number for the first quarter yet, but some province has to be below the 0.9% number and dragging it down. This part of the article would suggest that manufacturing and auto manufacturing isn't going to do too much for Ontario's economy in the second half of the year:
"On Tuesday, Statistics Canada said the manufacturing sector, which has struggled to gain momentum, advanced by 1% in July, supported by increases in transportation equipment, computer and electronics products. Construction, professional services and retail trade also showed slight increases during the month.
“We still have concerns about the manufacturing sector. Admittedly, production increased in July, but growth has been bolstered in recent months by a weather-related rebound in the auto sector,” said David Madani, Canadian economist for Capital Economics.
“Given the lack of investment in this large sector and increasingly intense competition from the southern U.S. and Mexico, Canadian auto production won’t be a positive force over the second half of the year.”"
This is an important issue for Ontario. Even with car sales picking up in the US, Ontario doesn't make nearly as many cars as before the recession of 2008. Ontario won't benefit as much.
With regards to GDP in the third quarter:
"In its last quarterly Monetary Policy Report, released in July, the Bank of Canada predicted a third-quarter advance in GDP of 2.3%, followed by 2.4% growth in the final quarter. The bank will publish its next MPR on Oct. 22."
That seems high to me, especially with all the events currently going on, although the Canadian dollar continuing to tank certainly should aid the Canadian and Ontario GDP numbers a bit. Note that the Ontario Finance Ministry is predicted Ontario's 2014 GDP to come in at 2.1%.
The Financial Post has this article on the August trade numbers for Canada, which adds some context for third quarter GDP predictions:
"August was expected to be another healthy month for exports — coming after a $2.2-billion surplus in the previous month. Instead, the value of goods and services delivered to global markets fell into the red by the tune of $610-million, as exports declined 2.5% and imports rose 3.9%.
Forecasters had called for a surplus of $1.6-billion in August — following the July tally, which Statistics Canada on Friday revised slightly downward from its previous estimate of $2.58-billion."
Obviously exports tanking isn't good for GDP and one has to think that the August numbers will end up hurting the third quarter GDP numbers for both Canada and Ontario. The composition of the export drop (autos) is a problem for Ontario:
"In Friday’s report, Statistics Canada said the value of exports fell by $44.2-billion in August, led by declines in shipments of vehicles and auto parts, as well as energy products. Imports, meanwhile, rose by $44.8-billion during the month."
So where do we end up for third quarter GDP for Canada and Ontario?
"However, David Madani, at Capital Economics, said “the fact that most export categories showed small declines, or flat growth, was a bit disconcerting.”
“This supports our view that, after stalling in July, GDP probably only grew modestly in August,” he said.
“This is further evidence that the consensus estimate for third-quarter growth of 3% is too high,” with Capital forecasting 2.4% annualized growth between July and September."
I'm still hoping for Ontario to release the first quarter GDP number. It would provide a lot of clarity.
Saturday, February 23, 2013
Ontario Third Quarter 2012 GDP Numbers
I haven't been able to find any media reporting on the third quarter GDP numbers for Ontario (which is in and of itself strange), but this Ministry of Finance web page looks to be reporting 0.1% (non-annualized):
"Ontario’s real Gross Domestic Product (GDP) on an industry basis and at basic prices increased 0.1% in the third quarter of 2012, following gains of 0.6% in the second quarter and 0.6% in the first quarter. Output in the goods-producing sector declined by 0.9% while service sector output rose by 0.3% in the third quarter."
That's exactly in-line with the overall number for Canada at 0.1%. I remember that being 0.6% on an annualized basis, but that number for Ontario doesn't seem to be reported here. I would like it, mainly because it would give more information if Ontario was ahead of Canada or behind. With rounding, Ontario's growth could be anywhere 0.06% to 0.14%, which could have a big effect on the annualized number.
In any case, that's not a good number and the fourth quarter isn't looking good either. Considering that Ontario's population growth is 1.2% (or at least it was in 2011 who knows what the number is now) per year, that means that on a per capita basis, GDP declined in the third quarter (1.2% per year is about 0.3% per quarter). The fourth quarter numbers should be interesting, as should the first of 2013.
"Ontario’s real Gross Domestic Product (GDP) on an industry basis and at basic prices increased 0.1% in the third quarter of 2012, following gains of 0.6% in the second quarter and 0.6% in the first quarter. Output in the goods-producing sector declined by 0.9% while service sector output rose by 0.3% in the third quarter."
That's exactly in-line with the overall number for Canada at 0.1%. I remember that being 0.6% on an annualized basis, but that number for Ontario doesn't seem to be reported here. I would like it, mainly because it would give more information if Ontario was ahead of Canada or behind. With rounding, Ontario's growth could be anywhere 0.06% to 0.14%, which could have a big effect on the annualized number.
In any case, that's not a good number and the fourth quarter isn't looking good either. Considering that Ontario's population growth is 1.2% (or at least it was in 2011 who knows what the number is now) per year, that means that on a per capita basis, GDP declined in the third quarter (1.2% per year is about 0.3% per quarter). The fourth quarter numbers should be interesting, as should the first of 2013.
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