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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. | 