TORONTO, ONTARIO--(Marketwire - Oct. 12, 2012) - The prospects for Ontario's economy have dimmed for 2012 and 2013 as growth continues to limp along at about 2 per cent per year, says a new forecast by Central 1 Credit Union.
The report forecasts slower growth, fewer jobs and a higher unemployment rate this year and in 2013 than Central 1 had projected in February.
"Since my last Ontario forecast in February 2012, I have downgraded 2012 real GDP growth to 2.1 per cent from 2.3 per cent and for 2013 to 1.9 per cent from 2.8 per cent," said Helmut Pastrick, chief economist for Central 1, the trade association and financial facility for credit unions in Ontario and British Columbia.
Pastrick said given the slow pace of growth and the weak U.S. economy, he has revised job numbers downward and the unemployment rate up.
"I now expect job growth of just 0.7 per cent this year, down from 1.6 per cent, and growth in 2013 of just 1.2 per cent, down from 2 per cent. I've raised the expected unemployment rate for 2012 to 7.8 per cent from 7.5 and in 2013 to 7.5 per cent instead of 7.0 per cent," said Pastrick.
The economy will be hampered by low population growth caused by flat immigration levels and a growing number of people heading to western provinces for jobs, Pastrick said.
Ontario's moderate growth performance will continue through 2014 before transitioning to above 3 per cent growth in 2016 and 2017 as the U.S. recovers, the report says.
- Ontario faces middling growth around 2 per cent until the U.S. economy grows faster
- Unemployment will decline gradually to 7 per cent in 2014 then drop to 5.6 per cent in 2017
- A growing number of Ontario residents will move west to find work
- Housing slowdown extends into 2013, with sales weak, starts down and prices stagnant
- Domestic-oriented industries will generate most growth due to lacklustre exports
- Greater U.S. growth will lift Ontario's growth to above 3 per cent in 2016 and 2017
The full report Ontario Economic Forecast 2012-2017 is available here: http://www.central1.com/publications/economics/pdf/ea/ea%202012_ont05.pdf
About 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 three million members and holds $83 billion in assets and is owned primarily by its member credit unions, 44 in B.C. and 108 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.