Economic and Revenue Forecasting and
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.
Down in July
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 Rate Up in June
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%.
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.
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.
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
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.