Despite challenges, Ontario's economy remains strong: RBC
Economics
TORONTO, June 22, 2006 — Ontario's economic
outlook continues to improve despite uncertainty in its manufacturing
sector, according to a new provincial forecast released today
by RBC Financial Group.
"With continued economic expansion and improvements
to its job picture, Ontario has demonstrated the staying power
of a $500-billion diversified economy," said Craig Wright,
vice-president and chief economist, RBC. "Last year,
Ontario saw growth of 2.8 per cent and it has proven capable
of achieving respectable growth again this year of around
3.1 per cent despite the manufacturing challenges."
Even with the challenges of employment cuts and inventory
surpluses, a silver lining exists for the province's manufacturing
sector. Buoyed by the emergence of lower input costs through
the decline in commodity prices, and the lift to export competitiveness
through the expected depreciation in the Canadian dollar,
manufacturers are likely to witness improved margins, the
report noted.
"With solid global growth and attractive investment
opportunities, this may be the best year for provincial productivity
growth since 2000," said Wright.
Another positive factor supporting Ontario's strong economic
growth is the improvement to its jobs picture. Over the past
year, the province has managed to create 115,000 jobs, over
and above the loss of 50,000 manufacturing jobs. This surge
in employment opportunities has helped Ontario weather the
storm of workers migrating to Alberta and B.C.
While regional differences exist across the country, Canada
is well positioned to absorb global economic shocks due as
a result of geographically diversified investments, a strong
consumer sector and sound fiscal policy. Newfoundland and
Labrador will be the provincial growth leader this year with
activity in the oil and nickel sectors driving growth. After
Newfoundland and Labrador, the strongest economies will be
west of the Manitoba-Ontario border for 2006.
The RBC Economics Provincial Outlook assesses the
provinces according to economic growth, employment growth,
unemployment rates, personal income growth, retail sales,
housing starts, and the Consumer Price Index.
According to the report (available online as of 8 a.m. E.D.T.,
at www.rbc.com/economics/market/pdf/provfcst.pdf), provincial
forecast details are as follows:
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For more information contact:
Craig Wright, RBC Financial Group Economics,
(416) 974-7457
Derek Holt, RBC Financial Group Economics,
(416) 974-6192
Kathy Bevan, RBC Financial Group Media Relations,
(416) 974-8810
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