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Ontario's economy poised for moderate growth: RBC Economics

TORONTO, March 19, 2013 /CNW/ - Ontario's economic momentum is expected to be 
restored this year as the fiscal uncertainty surrounding its top trading 
partner - the United States - continues to lift, according to the latest RBC 
Economics Provincial Outlook issued today. RBC anticipates provincial real GDP 
growth of 1.6 per cent in 2013, slightly below the national average of 1.8 per 
cent. 
"Although Ontario kicked-off 2013 with little more than a breeze in its sails, 
we expect the provincial economy to keep forging ahead," said Craig Wright, 
senior vice-president and chief economist, RBC. "Rising U.S. demand for the 
province's exports, and a slightly weaker Canadian dollar will boost Ontario's 
trade performance, though slowing domestic sectors such as residential 
investment will somewhat curb overall growth in the province." 
The Outlook notes that in the second half of 2012, economic activity largely 
stalled in Ontario. Recent indicators, such as sales by provincial 
manufacturers, wholesalers and retailers, merchandise trade with other 
countries and construction activity, point to stagnation. Much of this 
interference with Ontario's growth rate stemmed from heightened uncertainty in 
the U.S. surrounding the looming deadline of the so-called 'fiscal cliff', RBC 
says. 
"Concerns that a full-blown fiscal hit would torpedo the U.S. economy caused 
businesses and consumers south of the border, and in Canada, to adopt a 
wait-and-see stance," noted Wright. "Averting a swan dive over the 'fiscal 
cliff' removed a significant layer of uncertainty and we expect to see a 
pick-up in U.S. demand for Ontario's goods and services over time." 
RBC expects strong corporate balance sheets, low interest rates and intense 
competition to drive up business investment in Ontario in 2013. Residential 
investment, however, will likely cool as slower home resales that began in 
late-2012, start to apply downward pressure on new home construction. RBC 
forecasts housing starts to drop to 58,900 units in 2013 down from 76,900 in 
2012. 
The RBC Economics Provincial Outlook assesses the provinces according to 
economic growth, employment growth, unemployment rates, retail sales, housing 
starts and consumer price indices. The full report and provincial details are 
available online as of 8 a.m. ET today at 
rbc.com/economics/market/pdf/provfcst.pdf. 
Craig Wright, RBC Economics Research, 416-974-7457 Robert Hogue, RBC Economics 
Research, 416-974-6192 Elyse Lalonde, Communications, RBC Capital Markets, 
416-842-5635 
SOURCE: RBC 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/March2013/19/c5955.html 
CO: RBC
ST: Ontario
NI: FIN ECO  
-0- Mar/19/2013 09:00 GMT
 
 
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