TORONTO, ONTARIO--(Marketwire - April 7, 2011) - Ontario's economy will grow slowly over the next few years as it gradually recovers from the recession and unemployment will remain high, according to the Ontario Economic Forecast 2011-2014, released today by Central 1 Credit Union.
"Ontario's economy will grow by about 2.7 per cent this year, compared to 3 per cent last year," says Helmut Pastrick, Central 1's Chief Economist. "That slower rate of growth will continue in 2012, dropping to 2.6 per cent in 2013 before rising to 2.9 per cent in 2014."
Central 1 expects unemployment will slowly decline, remaining above 8 per cent this year, but eventually falling to 6.5 per cent in 2014, which will be a bit above the national forecast of 6.3 per cent in 2014.
Total income generated in the economy will increase by an average 5.1 per cent annually with labour income forecast to grow 4.4 per cent. The declining but high unemployment rate will keep wage increases to just below the inflation rate for most of the forecast period.
Domestic spending is the main growth driver in the province, led by investment spending, with moderate spending by consumers.
Government investment spending will drop noticeably this year with the ending of its fiscal stimulus, while government spending on goods and services grows at a low rate in order to deal with deficits at the federal and provincial levels. The trade sector continues to post large deficits throughout the forecast.
"The gains forecast in private domestic spending and exports for 2011 and 2012 won't be enough to fully offset the absence of fiscal stimulus spending that boosted the economic recovery in 2010," Pastrick continues.
Highlights of the report:
"Ontario's trade deficit is forecast to widen each year as moderate export growth will not be enough to offset rising imports," Pastrick says. "Canada's high currency and slow growth in the U.S. will dampen exports. It will take time for companies to diversify to new markets and products."
Pastrick is one of the private economic forecasters the province includes in its budget planning.
The full report, Ontario Economic Forecast 2011-2014, is available here.
Central 1
Central 1 is the central financial facility and trade association for the B.C. and Ontario credit union systems. Central 1 represents a consumer-oriented, full-service retail financial system that serves 2.9 million members and holds $70 billion in assets and is owned primarily by its member credit unions, 45 in B.C. and 119 in Ontario.
With offices in Vancouver, Mississauga, and Toronto, Central 1 provides a wide range of services such as liquidity management, direct banking, and flexible payment service solutions. For more information, visit www.central1.com.
Contact Information: Central 1 Credit Union
Art Chamberlain
Media Relations Manager
905.282.8534 or 1.800.661.6813 ext. 8534
achamberlain@central1.com
www.central1.com
or
Central 1 Credit Union
Helmut Pastrick
Chief Economist
905.282.8419 or (Vancouver: 604.737.5026)
1.800-661.6813, ext. 5026
hpastrick@central1.com