Ontario economic snapshot for July 14, 2012

July 14, 2012

TORONTO, ON, Jul 14, 2012/ Troy Media/ – Ontario’s international merchandise trade volumes increased in May, recovering most of the declines in April.

Imports increased $1.21 billion, month-over-month, while exports also increased $1.21 billion. As a result, Ontario’s international merchandise trade deficit was relatively unchanged at $8.48 billion in May.

In the first five months of 2012, international merchandise imports destined for Ontario totalled $109.1 billion, up $7.1 billion (or 6.9 per cent) from the same period last year. Growth was led by automotive products, industrial goods/materials, machinery/equipment and agricultural products, while international imports of energy products declined.

Year-to-May Ontario-origin merchandise exports totalled $68.1 billion, up $5.0 billion (or 8.0 per cent) yea-rover- year. Growth was led by automotive products, industrial goods/materials and machinery/equipment, while international exports of wood products declined.

Ontario’s international merchandise trade deficit totalled $40.9 billion so far this year, up $2.0 billion (or 5.3 per cent) year-over-year. We forecast that Ontario’s overall trade deficit, including international and domestic goods and services, will remain the largest drag on economic growth over the next few years. No material improvement in the overall trade deficit is expected through 2015 since growth in exports is generally matched by growth in imports.


Housing starts in Ontario totalled 70,700 units at a seasonally-adjusted annual rate (SAAR) in June, down 9.0 per cent from May. That is the second straight monthly decline from the eight-year high set in April.

June’s decline was entirely due to fewer multi-family unit starts in places other than Metro Toronto. Housing starts in metro Toronto totalled 42,000 units SAAR in June, up 1.4 per cent from May. In the rest of the province, starts decreased 20.9 per cent to 28,700 units SAAR. Multi-family starts in Ontario totalled 47,200 units SAAR, down 12.3 per cent from May, while single detached starts decreased 1.7 per cent to 23,500 units SAAR.

In the first half of 2012, housing starts in Ontario were up 22.6 per cent from the same period last year, due entirely to more multi-family unit construction. We forecast that starts in Ontario will rise 4 per cent this year and 6 per cent in 2013, following 12 per cent growth last year.


Business confidence among Ontario’s small and mid-sized business owners fell in the second quarter of 2012.

The Business Barometer Index (BBI) from the Canadian Federation of Independent Business (CFIB) ended the quarter at 60.7, down from 68.2 at the end of the first quarter. The BBI is a scale from 0 to 100, where a value above 50 means the number of owners who expect their business performance to be stronger in the near term out numbers those expecting weaker performance.

Most small- and mid-sized business owners indicate their overall state of business is currently satisfactory or good (87 per cent), while the rest indicate it is bad (13 per cent). Plans for full-time employment are unchanged for 73 per cent of business owners, while 14 per cent plan to increase jobs and 13 per cent plan to decrease jobs.

The main business constraint continues to be insufficient domestic demand, while the main cost concerns are still fuel, energy, taxes and regulation.

The BBI is a significant indicator of economic output in Ontario. The latest readings suggest real GDP growth was approximately 2.3 per cent in the first quarter and 1.0 per cent in the second quarter of 2012 at a seasonally-adjusted annualized rate (SAAR). That compares to the latest official preliminary estimate of 1.4 per cent SAAR of real GDP growth in the fourth quarter of 2011.

| Central 1 Credit Union

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