News Update

Economic and Revenue Forecasting and Analysis Branch

 

Economy

Ontario Economy Slows in First Quarter of 2008 Ontario’s real Gross Domestic Product declined 0.3% in the first calendar quarter of 2008, following a 0.1% increase in the fourth quarter of 2007.  The decline in constant-dollar GDP was largely due to a drop in business inventories, softer business investment, and continuing weakness in exports.  In 2007, Ontario’s GDP rose by 2.2%, following growth of 2.5% in 2006. Canada’s real Gross Domestic Product edged down 0.1% in the first quarter of 2008, its first quarterly decline since the second quarter of 2003.

 

Employment

Ontario Employment Down in July

Ontario employment declined by 18,900 net new jobs in July, following a loss of 23,900 jobs in June.  The unemployment rate fell to 6.4% in July from 6.7% in June.

 

Despite the recent declines, Ontario employment is up by a solid 1.8% (+116,700 jobs) over the first seven months of 2008 compared to the same period last year.

 

In 2007, the Ontario economy increased by 101,100 jobs (+1.6%), following a gain of 95,000 jobs (+1.5%) in 2006.  The unemployment rate averaged 6.4% in 2007, up slightly from 6.3% in 2006.  On an annual basis, full-time job gains of 64,300 accounted for about two-thirds of the overall gains in 2007.

 

Inflation

Ontario CPI Inflation Rate Up in June

The Ontario Consumer Price Index (CPI) inflation rate was 2.8% in June (year-to-year), up from 1.8% in May.  June’s increase in the CPI was mainly due to higher gasoline prices, which jumped 27.3% (year-to-year).  In 2007, the Ontario CPI inflation rate was 1.8%, unchanged from 2006.  The Canadian CPI inflation rate was 2.2% in 2007, while the U.S. inflation rate was 2.9%.

 

Households

Ontario housing starts declined 27.8% in July to 59,200 units (seasonally adjusted annual rate). Despite the sharp decline in July, Ontario housing starts are up 16.9% over the first seven months of this year, compared to the same period last year.  In 2007, Ontario recorded 68,123 housing starts, down 7.2% from 2006.

Ontario June home resales were down 12.2% from the same month a year ago to 20,485 units.  Over the first six months of 2008, home resales are 10.6% lower than during the same period in 2007.

 

Sales of Ontario new motor vehicles edged down 0.1% in June to a level of 51,378 units (seasonally adjusted). Over the first six months of 2008, Ontario auto sales are 0.7% ahead of the same period in 2007.

 

Ontario retail sales edged up 0.2% in May to $12.8 billion, marking the third consecutive monthly increase.  Over the first five months of 2008, retail sales are 5.8% higher than during the same period in 2007.

 

Investment and Business Activity

According to Statistics Canada’s Private and Public Investment Intentions Survey, Ontario businesses and public sector institutions plan to increase investment by 3.1%, or $3.2 billion, to $106.4 billion in 2008.  In 2007, total actual investment increased by 4.7%.

 

On a year-to-date basis, the value of non-residential building permits issued in Ontario over the first six months of 2008 is 2.2% higher, compared to the same period in 2007. A record $11.1 billion in non-residential building permits was issued in 2007.

 

Over the first six months of 2008, the value of Ontario international merchandise exports (customs basis) is down 12.9% from the same period in 2007, while the value of imports is 4.9% lower.

 

Ontario wholesale trade increased 1.3% in May to $21.7 billion, up for the third consecutive month.  Over the first five months of 2008, Ontario wholesale trade is 2.7% lower than during the same period in 2007.

 

The value of Ontario manufacturing sales increased 1.7% in June to $23.9 billion, up for the third month in a row. Over the first six months of 2008, Ontario manufacturing sales are 7.5% lower than during the same period in 2007. 






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