In 2012H1, the surge in exports, particularly as regards automotive products, explains the fact that Ontario’s economic growth exceeded the national average.
However, since 2011H2, employment growth has been listless. Indeed, there was first a sharp decline in job creation in the public sector, partly reversing the upward trend in the previous 24 months. Then, since this past April, it has been up to the private sector to lose jobs and thus offset an employment recovery in the public sector.
The subdued employment growth has had an impact on household income and ultimately on consumer spending, which should grow only 1.2% in 2012. We expect this growth to pick up to 1.7% in 2013. We also expect business investment growth to pick up in 2013. However, domestic demand should progress at a rate of no more than 1.5%, which is just greater than in 2012, as government and residential construction are expected to be a drag on economic growth.
External trade should contribute to economic growth in 2013, albeit in a smaller measure than in 2012.
For all of 2012, the Ontario economy is expected to expand 2.1% thanks above all to growth recorded in the first half of the year. For 2013, economic expansion is projected to be 1.5%.