With the 2015-2016 Ontario budget being released, the Ontario finance ministry got around to releasing the fourth quarter of 2014 GDP data on their quarterly accounts site.
The fourth quarter GDP growth number was 0.6% or 2.5% annualized. 2.5% is a relatively strong number given Ontario's GDP numbers since the Mike Harris hay days, although it was down sharply from the second and third quarter numbers which were 3.2% and 4.0% respectively annualized. Note that Canada's fourth quarter GDP number was 2.4% annualized, which is almost the same as Ontario's. The US GDP number was slightly less at 2.2%.
However first quarter growth was only 0.6% annualized, which dragged down the full 2014 Ontario GDP number reported in the quarterly accounts which was only 2.2%. The accounts page helpfully points out this is the strongest annual growth since 2010 (in 2013 GDP growth was only 1.3%) . I'll point out that the most recent provincial population growth rate was 0.9% annually, so for 2.2% a big portion of that was from population growth rather than productivity growth.
Some noteworthy tidbits from the quarterly accounts report and my comments:
"Capital spending on machinery and equipment rose 0.7% in 2014, after declining in the previous two years" - well that's obviously better than negative, but isn't great news for Ontario's productivity.
"Investment in intellectual property products was down 2.1% in 2014, following a 3.4% decrease in 2013." - this isn't particularly good for productivity either.
"Household disposable income rose 3.2%, after increasing 2.7% in 2013. Ontario’s household savings rate declined to 3.2% from 4.6% in 2013." - that's pretty good growth for disposable income, but the fact that Ontario's savings rate went down from last year to truly sad levels I think is a testament to the low growth housing bubble Ontario finds itself in.
"Businesses added $5.4 billion ($2007) to non-farm inventories in the
fourth quarter of 2014, after accumulating $1.7 billion worth of stocks
in the third quarter." - that doesn't bode well for first quarter GDP growth if there's a lot of inventories to draw down on.
"Exports rose 0.4% in the fourth quarter, following a strong 3.0% advance in the third quarter. Imports expanded 1.5%, after increasing 1.0% in the third quarter." - one would think with the low dollar that exports will be more impressive. If car manufacturing in Ontario is lower in the first quarter of 2015 due to retooling and shutdowns, that isn't going to be good for exports and GDP.
The Ontario first quarter GDP number should be interesting. The US number looks to be weak, similar to the first quarter of 2014 (when Ontario's was also weak). I think there's a pretty good assumption that the first quarter of Ontario will have weak numbers, but now the main question is if the second quarter is going to be weak too.
Showing posts with label second quarter. Show all posts
Showing posts with label second quarter. Show all posts
Tuesday, April 28, 2015
Wednesday, April 15, 2015
Canada GDP Growth Estimates Cut, What About Ontario
The IMF has cut Canada's growth estimates:
"Canada’s output is expected to increase by 2.2 per cent this year and 2.0 per cent in 2016, the Washington-based IMF said in its spring World Economic Outlook released Tuesday.
In January, the global lending body predicted growth of 2.3 per cent in 2015 and 2.1 per cent next year."
That's not a big cut, but I think that's optimistic for 2015. It is interesting that 2016 is only 2.0 considering the poor first quarter 2015 number.
Now the Bank of Canada has cut as well:
"The bank now says the Canadian economy will grow 1.9 per cent this year, down from the 2.1-per-cent pace it forecast in January, according to its latest quarterly forecast, released Wednesday.
The projection is based on no growth in the first quarter, and annualized rates of 1.8 per cent, 2.8 per cent and 2.5 per cent over the following three quarters as exports, business investment and job creation rebound."
A prediction of 1.9% seems reasonable to me. The quarterly numbers are certainly interesting as the BoC assumes a snapback from zero percent growth in the first quarter to 1.8% in the second (which isn't in itself impressive). I think the big question mark for everyone is what growth in the second quartet going to be like. Is the first quarter zero growth a weather related anomaly (some predictions in the US like the Atlanta Fed are also low) or will it continue in the second quarter?
For Ontario, with a federal GDP prediction of zero, even with Alberta doing poorly, Ontario by virtue of its massive size can not have that high a number. Probably even more important for Ontario is what the US does in the second quarter. RBC had a March prediction of 3.3% GDP growth for Ontario which I don't think is going to be made now. Bizarrely Toronto still had year over year house price increases of over 10% in March. Ontario's economy is doing some strange things and the second quarter is going to be key.
"Canada’s output is expected to increase by 2.2 per cent this year and 2.0 per cent in 2016, the Washington-based IMF said in its spring World Economic Outlook released Tuesday.
In January, the global lending body predicted growth of 2.3 per cent in 2015 and 2.1 per cent next year."
That's not a big cut, but I think that's optimistic for 2015. It is interesting that 2016 is only 2.0 considering the poor first quarter 2015 number.
Now the Bank of Canada has cut as well:
"The bank now says the Canadian economy will grow 1.9 per cent this year, down from the 2.1-per-cent pace it forecast in January, according to its latest quarterly forecast, released Wednesday.
The projection is based on no growth in the first quarter, and annualized rates of 1.8 per cent, 2.8 per cent and 2.5 per cent over the following three quarters as exports, business investment and job creation rebound."
A prediction of 1.9% seems reasonable to me. The quarterly numbers are certainly interesting as the BoC assumes a snapback from zero percent growth in the first quarter to 1.8% in the second (which isn't in itself impressive). I think the big question mark for everyone is what growth in the second quartet going to be like. Is the first quarter zero growth a weather related anomaly (some predictions in the US like the Atlanta Fed are also low) or will it continue in the second quarter?
For Ontario, with a federal GDP prediction of zero, even with Alberta doing poorly, Ontario by virtue of its massive size can not have that high a number. Probably even more important for Ontario is what the US does in the second quarter. RBC had a March prediction of 3.3% GDP growth for Ontario which I don't think is going to be made now. Bizarrely Toronto still had year over year house price increases of over 10% in March. Ontario's economy is doing some strange things and the second quarter is going to be key.
Monday, November 17, 2014
Where's the First Quarter of 2014 Ontario GDP Numbers Charles Sousa?
The Ontario finance ministry provides quarterly updates of Ontario's finances here:
http://www.fin.gov.on.ca/en/budget/finances/2013/
From the page itself:
"As required by the Fiscal Transparency and Accountability Act, the First Quarter Ontario Finances is released on or before August 15 and the Third Quarter Ontario Finances is released on or before February 15."
It is well past August 15th and I've been checking, but the update isn't there. It is my guess that Ontario's GDP in the first quarter may have been negative (or at least very low). The government had been predicting GDP growth of 2.1% in the 2014 budget document. That seems unlikely now.
There is supposed to be an update today, so maybe we'll finally learn the 2014 first quarter GDP numbers.
http://www.fin.gov.on.ca/en/budget/finances/2013/
From the page itself:
"As required by the Fiscal Transparency and Accountability Act, the First Quarter Ontario Finances is released on or before August 15 and the Third Quarter Ontario Finances is released on or before February 15."
It is well past August 15th and I've been checking, but the update isn't there. It is my guess that Ontario's GDP in the first quarter may have been negative (or at least very low). The government had been predicting GDP growth of 2.1% in the 2014 budget document. That seems unlikely now.
There is supposed to be an update today, so maybe we'll finally learn the 2014 first quarter GDP numbers.
Wednesday, July 30, 2014
A Closer Look at Ontario's June 2014 Employment Numbers
A blogged briefly about the poor Ontario jobs numbers for June, but I said I would take a closer look so I am.
Total employment in June from Statscan was 6,900,800. That was down -0.5% from June and up 0.1% from the previous year. Considering that population growth was around 0.9% for Ontario currently, that's quite poor performance and problematic for tax revenues and GDP growth.
Here's the population numbers for the last six months:
December 11,267,600
January, 11,278,400
February 11,287,300
March 11,298,600
April11,313,900
May 11,323,300
June 11,336,000
Employment
December 6,876,800
January 6,882,800
February 6,888,900
March 6,902,300
April 6,919,900
May 6,934,700
June 6,900,800
Full-Time Employment
December 5,577,500
January 5,600,600
February 5,605,900
March 5,599,400
April 5,625,200
May 5,594,800
June 5,575,900
Part-Time Employment
December 1,299,200
January 1,282,200
February 1,283,000
March 1,302,900
April 1,294,000
May 1,339,900
June 1,324,900
Looking over the past six months, the numbers aren't great. Population is up 0.61% compared to overall employment up 0.35%. Considerably more disturbing is that full-time employment over the past six months is actually down 0.03%. That's not good for Ontario's GDP growth over the first half nor is good for provincial tax revenues, as Ontario's income taxes are highly reliant on surtaxes targeted towards those earning above the median.
Part-time was at least up 1.98%, although that indicates the jobs Ontario is creating are low paying part-time jobs that as mentioned earlier, don't pay a lot in provincial income taxes.
Total employment in June from Statscan was 6,900,800. That was down -0.5% from June and up 0.1% from the previous year. Considering that population growth was around 0.9% for Ontario currently, that's quite poor performance and problematic for tax revenues and GDP growth.
Here's the population numbers for the last six months:
December 11,267,600
January, 11,278,400
February 11,287,300
March 11,298,600
April11,313,900
May 11,323,300
June 11,336,000
Employment
December 6,876,800
January 6,882,800
February 6,888,900
March 6,902,300
April 6,919,900
May 6,934,700
June 6,900,800
Full-Time Employment
December 5,577,500
January 5,600,600
February 5,605,900
March 5,599,400
April 5,625,200
May 5,594,800
June 5,575,900
Part-Time Employment
December 1,299,200
January 1,282,200
February 1,283,000
March 1,302,900
April 1,294,000
May 1,339,900
June 1,324,900
Looking over the past six months, the numbers aren't great. Population is up 0.61% compared to overall employment up 0.35%. Considerably more disturbing is that full-time employment over the past six months is actually down 0.03%. That's not good for Ontario's GDP growth over the first half nor is good for provincial tax revenues, as Ontario's income taxes are highly reliant on surtaxes targeted towards those earning above the median.
Part-time was at least up 1.98%, although that indicates the jobs Ontario is creating are low paying part-time jobs that as mentioned earlier, don't pay a lot in provincial income taxes.
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