TORONTO—Ontario’s economy is showing signs that it is back on track for modest growth in 2012 following a slowdown in activity earlier this year, according to RBC Economics Provincial Outlook report.
The bank forecasts Ontario’s economy grew by two per cent in 2011 and will grow 2.3 per cent in 2012.
“Barring any major slippage in the European sovereign debt crisis, Ontario’s economy is now on a path of modest growth that will extend into next year,” said Craig Wright, senior vice-president at RBC. “Recently, we have seen further recovery in the manufacturing sector, thanks in large part to rising vehicle production.”
The report says the earthquake and tsunami in Japan earlier this year severely disrupted Ontario’s vehicle production.
Since August, however, the pace of auto production has trended higher—accelerating notably in November. But levels still remain below those at the beginning of 2011.
Other Ontario manufacturing industries are also beginning to heat up—particularly machinery, primary metals, and fabricated metal products.
The provincial labour market has experienced some ups and downs after starting off strong—with the creation of 110,000 net new jobs—employment in the province has shifted down several gears in recent months, with the unemployment rate increasing to 7.9 per cent in November.