Economic Analysis of Ontario

Transcription

1 Economic Analysis of Ontario Volume 8 Issue 4 December 2017 ISSN: Ontario Economic Forecast Highlights Slower, but moderate, economic growth through 2020 Central 1 predicts job growth of 1.5 per cent and unemployment rate slide to 5.9 per cent in 2018 Significant population growth ahead, with substantial impacts on labour and housing markets NAFTA outcome could have major implications for manufacturing and provincial economy Housing market expected to hold steady, a crash not likely Global economic recession, financial crisis, or geopolitical crisis event pose largest risks to Ontario economy Summary Ontario s economy will see slower growth in the medium term following a near three per cent growth performance in Slower growth emanates largely from personal consumption and residential spending with a small drag from a shrinking trade balance. Offsetting slower growth in those sectors is an expected pickup in business investment spending and in government capital spending. Real gross Domestic Product (GDP) growth is predicted to slow to 2.5 per cent in 2018 from an estimated 2.8 per cent in In 2019 and 2020, real GDP growth is placed at 2.4 per cent and 2.3 per cent, respectively. Nominal GDP growth is also forecast to slow in 2018 to 4.2 per cent from 4.8 per cent in Total income of employees accelerates to 5.9 per cent in 2018 from an estimated 3.9 per cent in 2017 on faster growth in the average hourly wage rate due to the minimum wage increase and to employment growth. Forecast Summary: Ontario Real GDP, % chg Nominal GDP, % chg Employment, % chg Unemployment Rate (%) Population, % chg Housing starts, units (000s) Retail sales, % chg Personal income, % chg Net operating surplus: Corporations, % chg Consumer price index, % chg Source: Statistics Canada, Central 1 CU. 1

2 Job gains in 2018 are expected to slow to 1.5 per cent from an estimated 1.8 per cent in The unemployment rate in 2018 will slide to 5.9 per cent. Labour force growth keeps pace with employment due to high in-migration and population growth in 2019 and The minimum wage increase will cut into potential employment growth. Population growth to remain high at 1.6 per cent before slowing to 1.4 per cent in Less interprovincial migration plays out through Housing is expected to hold up and make modest gains following the adjustment to housing policy changes. Housing starts are forecast to slide lower in 2018 from around 80,000 units in 2017 and rise thereafter assisted by more government funding. Renovation spending is primed to grow at a faster pace. Industry GDP growth will remain faster in services-producing industries than in goods-producing during Service industries are expected to advance 2.8 per cent in 2018 while goods industries post 1.6 per cent growth. Private service industries will advance 3.3 per cent. Moderate manufacturing GDP growth is expected with slow growth in auto and parts output offset by more robust growth in machinery, food and other manufacturing. Recent economic indicators positive Recent economic indicators, particularly those related to the domestic economy, signal growth in most areas as follows: Employment up 1.7 per cent The unemployment rate is below six per cent Wages and salaries up 3.7 per cent Retail sales up 7.0 per cent New vehicle unit sales up 5.2 per cent Housing sales down 9.8 per cent; prices up 10.9 per cent All areas housing starts up 8.7 per cent Private non-residential building permits up 10.1 per cent Population growth 1.6 per cent International goods exports down 2.3 per cent International tourist visits up 4.7 per cent Manufacturing sales up 2.2 per cent Wholesale sales up 9.0 per cent Economic activity related to external markets, notably international merchandise exports, is weaker. Tourism service exports are still rising, however. Interprovincial exports are likely rising - with Alberta and Saskatchewan no longer in recession and most other provincial economies growing however, no current data is available. Ontario s Ministry of Finance estimates first half 2017 real GDP growth at 3.7 per cent 1. A slowdown, though of modest proportions, is very likely to show up in the second half of Third quarter real GDP growth is likely to slip below 3.0 per cent annualized but fourth quarter growth is seen making up for most of that slippage. Central 1 s forecast for 2017 is 2.8 per cent real GDP growth with nominal GDP growth at 4.8 per cent. Should this materialize, real GDP growth will be in the 2.5 to 3.0 per cent range for the fourth consecutive year and the best four-year performance since the late 1990s. Economic expansion to continue With no economic recession anticipated in the U.S. or in any major economy during the next three years, Ontario s economy will not be pulled into a recession as seen in and on other similar occasions. A global recession or geopolitical crisis event or policy mistake may well play out during the next three years, but these occurrences are not possible to accurately predict. Available leading economic indicators are currently not flashing recession. This economic expansion has the potential to be of very long duration because the U.S. and European economies are still recovering from their financial crises of and both have considerable pent-up demand to drive growth. 1 Ontario Economic Accounts, Second Quarter of Economic Analysis of Ontario 2

3 Moderate growth in 2018 Growth is expected to slow in 2018 to 2.5 per cent real GDP and 4.2 per cent nominal GDP from 2017 s more robust performance. Most of 2018 s growth slowdown is centred in personal consumption and residential investment spending with a small drag from net exports. Real final domestic demand growth is predicted to slow to 2.9 per cent from 3.4 per cent in Business investment spending, excluding residential, will post moderately faster growth, along with government capital spending. Minimum wage impacts A hot issue going into 2018 is the minimum wage increase, which will be rising to $14.00 on January 1, 2018 from $11.60 and to $15.00 on January 1, Various estimates have been offered up on its potential impact on the labour market and economy ranging from modest to substantially negative but all agree on the uncertainty surrounding those estimates. In assessing its impact, other factors influencing wages and employment need to be taken into account or controlled not an easy or precise task. The Financial Accountability Office (FAO) released its estimate of a net loss of approximately 50,000 jobs (0.7 per cent of total employment), with job losses concentrated among teens and young adults 2. The FAO also recognized that because of the large 20 per cent increase in 2018, losses could be even higher. The FAO arrived at its net figure with an estimate of 65,000 jobs lost due to higher payroll costs by businesses partially offset by a 15,000 job gain due to higher incomes and more minimum wage workers increasing their spending. Our labour market forecast has the unemployment rate at 5.9 per cent in The forecast incorporates a faster increase in average hourly wage in 2018 to 4.5 per cent from 3.2 per cent in 2017 because of the minimum wage increase and labour market conditions. Labour income growth receives a boost from the minimum wage increase in 2018 expanding 5.9 per cent, compared to the estimated 3.9 per cent in Job growth slows in 2018 but remains fairly 2 minimum_wage. robust at a predicted 1.5 per cent. The labour force participation rate slides to 64.8 from 64.9 in 2017, primarily due to demographics. Without the minimum wage increase, the provincial forecast model used shows a lesser impact than the FAO. Through 2020, employment is 35,000 persons higher and the unemployment rate is 0.3 percentage points lower in the model s estimation with no minimum wage increase, holding everything else constant. Interestingly, the model generates less labour income, personal consumption, and GDP growth with no minimum wage increase. NAFTA uncertainties With Ontario s export market highly dependent on the U.S. market, renegotiation or the possible breakup of NAFTA is a considerable risk to, and source of uncertainty for, the province s economy. After five rounds of negotiations, some progress on digital trade, telecommunications, food safety, custom enforcement, and environmental standards was made, but there was no progress on the substantive and contentious issues of U.S. domestic auto content, NAFTA s dispute settlement mechanism, the U.S. five-year expiration clause, dairy and egg supply management, and government procurement. Round six is set for late January in Montreal, with a final round in March. The U.S. and Mexican political calendars demand that a new deal be concluded quickly, but this will not be possible without compromises on all sides. The outcome is far from certain. Possible scenarios include: a new NAFTA; the U.S. withdraws from NAFTA while Canada and Mexico Economic Analysis of Ontario 3

4 remain in the deal; or the dissolution of NAFTA. A new NAFTA has the potential to make a small contribution to growth, while the U.S. withdrawal scenario would probably lead to a modest reduction in GDP. A NAFTA breakup causes larger losses to the economy 3. Research from C.D. Howe indicates that in the event of a U.S. walkout, the loss of export markets would be concentrated in the automotive and chemicalsrubber-plastics sectors, with lesser impacts on machinery and equipment, food products, and textiles and clothing. These export losses would, in turn, cause some reductions in domestic activity across a number of sectors. Because these manufacturing sectors have a large presence in Ontario s economy, a NAFTA breakup would have a substantial negative impact on the province s economy. The most negative outcome would begin to play out in 2019 and beyond, following the six-month notice of withdrawl period. However, the currency market would respond immediately on the announcement and send the loonie lower. The weaker economic outlook for Canada would quite likely prompt the Bank of Canada to pause its rate normalization process. Both of these effects would partially offset some of the negative impacts associated with a NAFTA breakup. Looking ahead to 2020 Moderate growth remains the byword for Ontario s economy in the medium term in an environment of gradually higher interest rates and Canadian dollar as well as U.S. economic growth in the 2.0 to 2.5 per cent range. Growth in the rest of Canada will also be in the moderate camp. Fiscal policy settings look to remain mildly stimulative with the status quo in trade policy presumed, though this is a downside risk. The economy s dependence on domestic demand is a prominent feature, accounting for all of the growth, while trade s negative contribution to growth will continue as net exports decline steadily. Within domestic demand, real personal consumption growth slows to 2.7 per cent in 2020 and business investment is expected to gain momentum, but this is a wild card in the forecast and may disappoint. Conditions appear conducive for faster investment spending 3 nafta-renegotiation-what-if-us-walks-away but not across all industries or sectors. Residential investment spending growth will also slow further but is forecast to pick up mildly after 2018 on more new construction. Faster renovation spending is a notable feature in this forecast, which will be boosted by deteriorating home purchase affordability and by increased spending under the National Housing Strategy 4. Total income growth in 2019 and 2020 will be fairly stable at 4.9 per cent and 4.7 per cent, respectively. Personal income growth slows to 4.6 per cent in 2020 from 5.1 per cent in 2018, mainly on slower labour income growth on the heels of the minimum wage hike. Household income follows a similar path and receives a modest lift from rising net property income growth but a drag from net transfers payments (mostly taxes paid less government payments received). Corporation profits, or net operating surplus, will turn slightly negative in 2018 but resume generating moderate gains in the following two years. The boost to labour income in 2018 from the minimum wage increase results in temporarily lower profits. However, the 2018 result could also register a positive gain given the margin of error associated with the forecast. Population growth will remain relatively high at 1.6 per cent in 2019 and 1.4 per cent in 2020 with a high international net inflow mostly offsetting diminishing interprovincial net inflow. Population growth during the forecast period would be the best three-year performance since 4 Economic Analysis of Ontario 4

5 the turn of the century, with substantial impacts on labour and housing markets. Mixed performances The growth shift to services-producing industries during the past four years extends into 2018 but thereafter goods-producing industries are forecast to generate firming growth while service industries cool. Slowing consumer spending impacts several industries, notably retail and wholesale trade and real estate. Construction and manufacturing will lead goods-producing industries to faster, but still moderate, growth. Construction industry has been driven by residential construction in most years since the last recession and especially in the three years ending Non-residential building and engineering construction have languished with low, and sometimes declining, capital investment spending, which is expected to turn higher. Residential construction GDP will slow, with modest declines in housing starts before climbing in Manufacturing GDP is forecast to post another small gain in 2018, as in 2017, mainly due to the auto sector dealing with little to no growth in exports. The peak auto situation in the U.S. will result in a range-bound performance ahead for the province s auto sector and possibly lower output should U.S. trade policy turn more restrictive. However, outside of auto and other sectors, such as paper, primary metals, and computers, manufacturing will be pulled up by growth in machinery, fabricated metals, food, chemicals, and plastics. While consumer and housing related services industries look to experience slower growth, industries oriented to business services will face sufficient demand to keep growing at a healthy pace. Professional, technical, and information sectors are the main sources of growth in this space. Other private sector industries, such as accommodation and food services and transportation and warehousing, will continue to expand at faster pace than overall GDP. Public-oriented service industries, such as education and health, are seen growing at a the same slow-to-moderate pace as in prior years. Government services GDP growth is pegged at around one per cent annually. Housing policy impacts The housing market is going through an adjustment phase in response to Ontario s Fair Housing Plan 5 (FHP) brought in last April. Another policy change, the federal B-20 guideline, is coming in 2018, affecting uninsured mortgages issued by chartered banks. Beyond these policy changes, housing demand fundamentals will remain favourable and supportive of a high level of sales and housing starts. Some moderation in sales and starts activity is foreseen because of these policy changes, alongside the trend towards higher mortgage rates and housing prices. Housing sales plunged for three months following the introduction of the FHP and have partially rebounded, spurred on by lower prices and sales pulled forward by the looming B-20 credit tightening. A strong sales finish to the year is expected, followed by temporary weakness in the first few months in Economic Analysis of Ontario 5

6 How housing prices behave depends not only on sales activity but also on supply developments. New MLS residential listings have yet to materially respond to higher prices, as in previous cycles, resulting in supply-constrained markets. New housing construction is an important component of supply but housing starts take considerable time to initiate and bring onto the market as a finished product, and hence, starts are not able to respond to market conditions as quickly as new listings. The muted response of listings by existing homeowners could be related to demographics and limited supply options. Market conditions eased considerably following FHP s impact with prices declining moderately in many markets. Toronto s Home Price Index (HPI) declined 6.0 per cent from its May 2017 high to September 2017 but has firmed since. Guelph s HPI is off about two per cent while Ottawa s HPI continued to climb. Housing outlook Following policy changes, housing sales will stabilize at a lower level than in They will gradually grind higher, but will be restrained by higher mortgage rates and housing prices. No housing crash is foreseen unless there is a global economic recession or geopolitical crisis: however, this is how housing cycles usually end. Barring the recession scenario, the next most likely cycle-ending scenario would be a softlanding brought about by deteriorating home purchase affordability and tighter credit restrictions. The soft-landing scenario would take years to unfold, while the recession scenario could occur suddenly. This forecast sees modestly fewer housing sales and starts in 2018 than in 2017 but with higher prices. Housing starts in 2019 and 2020 will post small gains on supportive market conditions and on more non-market activity by the federal and provincial governments. Increased renovation spending is another factor contributing to more residential construction activity. have significant negative impacts on the province as in 1982 and A trade war would tip the global economy into recession. Helmut Pastrick Chief Economist, Central 1 Credit Union hpastrick@central1.com Appendix Tables GDP, Income-based Gross Domestic Expenditure ($millions) Gross Domestic Expenditure ($2007 millions) Residential investment Non-residential construction investment.10 GDP by Industry Manufacturing GDP ($2007 millions) Employment by Industry Labour market indicators Population components External economic forecasts Forecast risks A global economic recession, financial crisis, or geopolitical crisis event pose the largest risks to Ontario s economy. These occurrences would Economic Analysis of Ontario 6

7 Gross Domestic Product, Income-based ($ Millions): Ontario GDP at market prices 762, , , , , ,378 % change Compensation of employees1. 401, , , , , ,462 % change Net operating surplus: Corporations 101, , , , , ,757 % change Net operating surplus: Mixed income 63,018 65,443 68,391 71,590 74,849 78,185 % change Fixed capital consumption 106, , , , , ,532 % change Indirect taxes less subsidies 89,789 94,815 99, , , ,894 % change Net domestic income (Factor cost) 565, , , , , ,952 % change Personal Income 621, , , , , ,237 % change Primary household income 512, , , , , ,000 % change Compensation of employees2. 396, , , , , ,149 % change Net mixed income 63,018 65,443 68,391 71,590 74,849 78,185 % change Net property income 52,960 53,169 55,575 55,854 56,602 57,666 % change Transfer payments received 108, , , , , ,237 % change Transfer payments paid 191, , , , , ,132 % change Household disposable income 430, , , , , ,105 % change Household expenditure 433, , , , , ,445 % change Household net saving 11,646 14,485 7,929 4,999 2, % change Household saving rate Economic Analysis of Ontario 7

8 Gross Domestic Expenditures ($ Millions): Ontario GDP, expenditure-based 762, , , , , ,378 % change Household consumption 433, , , , , ,445 % change Durable goods 53,338 58,498 64,181 68,561 71,869 75,629 % change Semi-durable goods 30,321 31,367 33,662 35,623 37,496 39,544 % change Non-durable goods 100, , , , , ,927 % change Services 249, , , , , ,346 % change NPISH consumption 11,751 12,184 12,827 13,375 13,991 14,590 % change Government current 154, , , , , ,193 % change Government capital 26,558 28,149 29,035 30,617 32,808 33,747 % change Business gross fixed capital 129, , , , , ,217 % change Residential structures 58,531 66,033 74,368 78,036 83,079 89,348 % change Machinery and equipment 28,739 27,130 27,386 28,497 30,447 32,196 % change Non-residential structures 27,495 24,685 24,520 25,244 27,074 28,111 % change Intellectual property 14,476 14,446 14,824 15,540 16,545 17,562 % change NPISH investment 1,155 1,394 1,470 1,535 1,597 1,662 % change Final domestic demand 756, , , , , ,853 % change Exports 401, , , , , ,682 % change Imports 400, , , , , ,647 % change Net exports 1,788 12,379 6,197 4, Inventory change 3,577-1,135 3, ,293 2,490 Economic Analysis of Ontario 8

9 Gross Domestic Product, Expenditures ($2007 Millions): Ontario GDP, expenditure-based 667, , , , , ,668 % change Household consumption 387, , , , , ,740 % change Durable goods 54,944 59,010 64,119 67,483 69,646 72,060 % change Semi-durable goods 31,871 32,978 35,810 38,040 40,117 41,939 % change Non-durable goods 85,457 87,080 89,838 93,049 96,152 99,030 % change Services 216, , , , , ,598 % change NPISH consumption 10,773 10,777 11,162 11,442 11,726 11,983 % change Government current 128, , , , , ,141 % change Government capital 23,818 23,357 23,927 24,887 26,298 26,596 % change Business gross fixed capital 106, , , , , ,715 % change Residential structures 45,318 48,525 51,836 52,453 54,296 56,752 % change Machinery and equipment 26,922 24,832 24,981 25,672 27,100 28,342 % change Non-residential structures 22,425 20,149 19,842 20,066 21,120 21,513 % change Intellectual property 12,124 11,715 11,802 12,151 12,651 13,108 % change NPISH investment 1,021 1,193 1,232 1,268 1,300 1,330 % change Final domestic demand 656, , , , , ,685 % change Exports 350, , , , , ,595 % change Imports 343, , , , , ,509 % change Net exports 6,872 15,771 10,177 8,185 2,757 1,086 Inventory change 1,454-1,366 1,497-1,358 1, Economic Analysis of Ontario 9

10 Residential Investment: Ontario $ Millions Total residential investment 58,531 66,033 74,368 78,036 83,079 89,348 % change New dwellings 23,217 26,723 30,283 30,625 31,972 33,736 % change Renovations 26,586 29,807 33,135 36,018 39,242 43,226 % change Total acquisition costs 8,310 9,052 10,449 10,867 11,317 11,814 % change Other residential construction % change $ 2007 Millions Total residential investment 45,318 48,525 51,836 52,453 54,296 56,752 % change New dwellings 17,976 19,638 21,108 20,585 20,895 21,429 % change Renovations 20,585 21,904 23,096 24,210 25,646 27,456 % change Total acquisition costs 6,434 6,652 7,283 7,304 7,396 7,504 % change Other residential construction % change Housing starts, units 70,156 74,952 80,692 77,071 79,982 83,136 % change Non-residential Construction Investment ($2007 millions): Ontario Total non-residential construction 34,685 34,861 35,259 36,068 37,958 38,601 % change Engineering construction 20,166 19,542 19,393 19,356 20,170 20,163 % change Building construction 14,519 15,320 15,867 16,712 17,788 18,439 % change Commercial 5,711 6,317 6,444 6,776 7,136 7,408 % change Industrial 2,893 2,838 2,925 2,942 3,086 3,275 % change Institutional-government 6,088 6,337 6,671 7,168 7,740 7,929 % change Economic Analysis of Ontario 10

11 Gross Domestic Product by Industry ($2007 Millions): Ontario All industries 618, , , , , ,609 % change Goods-producing industries 141, , , , , ,456 % change Agriculture, forestry, fishing & hunting 5,054 5,023 5,273 5,315 5,465 5,605 % change Mining 7,961 7,797 7,889 8,051 8,061 8,449 % change Utilities 11,728 11,918 12,079 12,356 12,629 12,873 % change Construction 37,551 38,142 39,034 39,722 41,292 42,701 % change Manufacturing 79,390 81,005 81,848 82,962 85,108 86,828 % change Service-producing industries 478, , , , , ,688 % change Wholesale trade 42,783 43,976 47,009 48,669 50,035 51,198 % change Retail trade 32,602 34,024 36,132 37,609 38,917 40,160 % change Transportation and warehousing 24,697 25,539 26,284 27,079 27,884 28,517 % change Information and cultural 22,402 22,708 22,813 23,496 24,138 24,696 % change Finance, insurance & real estate 91,638 95,909 99, , , ,399 % change Owner-occupied dwellings 51,337 52,855 54,501 56,079 57,584 58,960 % change Professional, scientific, and technical 39,793 41,207 42,011 43,367 44,725 46,067 % change Admin., support, management 24,020 24,086 24,465 25,258 25,933 26,495 % change Education 35,673 36,207 36,568 36,965 37,399 37,752 % change Health care and social assistance 40,451 41,887 42,750 43,825 44,882 45,931 % change Arts, entertainment and recreation 4,969 5,246 5,440 5,563 5,710 5,851 % change Accommodation and food 12,509 12,971 13,339 13,860 14,260 14,607 % change Other services 12,058 11,941 11,735 11,868 12,011 12,192 % change Public administration 41,122 41,698 42,741 43,177 43,634 44,064 % change Economic Analysis of Ontario 11

12 Manufacturing Gross Domestic Product ($2007 Millions): Ontario Manufacturing 79,390 81,005 81,848 82,962 85,108 86,828 % change Motor vehicles 8,050 8,252 7,876 7,856 7,871 7,857 % change Motor vehicle parts 8,030 8,428 7,959 7,974 8,022 8,119 % change Other transportation equipment 3,296 3,322 3,369 3,363 3,400 3,468 % change Food products 9,505 9,932 10,207 10,464 10,877 11,192 % change Wood products 1,468 1,597 1,596 1,613 1,645 1,696 % change Paper products 2,460 2,396 2,342 2,297 2,292 2,301 % change Petroleum and coal products 1,518 1,427 1,376 1,438 1,526 1,578 % change Chemical products 6,585 6,764 6,624 6,811 7,014 7,175 % change Plastic products 4,232 4,578 4,857 4,957 5,119 5,241 % change Non-metallic mineral products 2,322 2,366 2,419 2,447 2,522 2,575 % change Primary metals 5,608 5,812 5,881 5,909 5,978 6,026 % change Fabricated metals 5,639 5,426 5,495 5,517 5,680 5,802 % change Machinery 6,537 6,521 7,207 7,082 7,450 7,738 % change Computer and electronic products 3,172 3,171 3,187 3,386 3,453 3,426 % change Other manufacturing 10,967 11,012 11,453 11,849 12,258 12,635 % change Economic Analysis of Ontario 12

13 Labour Market Indicators: Ontario Source population, 000s 11, , , , , ,175.6 % change Labour force participation rate % Labour force, 000s 7, , , , , ,848.0 % change Employment, 000s 6, , , , , ,385.9 % change Unemployment, 000s Unemployment rate, % Average weekly hours % change Average hourly wage rate, $ % change Unit labour costs, % change Employment by Industry (000s): Ontario All Industries 6, , , , , ,385.9 % change Agriculture % change Other primary % change Utilities % change Construction % change Manufacturing % change Trade 1, , , , , ,106.3 % change Transportation & warehousing % change FIREL %change Information, professional, managerial % change Education % change Health & social services % change Accommodation & food % change Other services % change Public administration Economic Analysis of Ontario 13

14 Population and Factors of Growth (000s): Ontario Population 13, , , , , ,879.0 % change Births Deaths Natural increase Net migration Net international Net interprovincial Key External Economic Forecasts U.S. real GDP, % chg Canada real GDP, % chg European Union real GDP, % chg China real GDP, % chg Japan real GDP, % chg Canada 3-month t-bill, % Canada GoC long-term bond, % U.S.-Canada exchange rate, cents/dollar Crude oil WTI, US$ per barrel Henry Hub, US$ mmbtu The data used in these tables are drawn from a number of sources: Statistics Canada, U.S. Bureau of Economic Analysis, International Monetary Fund, Consensus Forecasts; Central 1 Credit Union for all Ontario Forecasts. Terms Published by the Economics Department of Central 1 Credit Union, 1441 Creekside Drive, Vancouver, B.C. V6J 4S7 Central 1 Credit Union, This work may not be reproduced in whole or part, by photocopy or other means, without permission of Central 1 Credit Union. Economic Analysis of British Columbia (the Analysis ) may have forward-looking statements about the future economic growth of the Province of Ontario and its regions. These statements are subject to risk and uncertainty. Actual results may differ due to a variety of factors, including regulatory or legislative developments, competition, technological change, global capital market activity and general economic conditions in Canada, North America or internationally. This list is not exhaustive of the factors that may affect any of the Analysis forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Analysis forward-looking statements. The Analysis and Central 1 Credit Union disclaims any and all warranties, whether express or implied, including (without limitation) any implied warranties of merchantability or fitness for a particular purpose. The Analysis and Central 1 Credit Union will not accept any responsibility for the reader s use of the data and / or opinions presented in the Analysis, or any loss arising therefrom. Chief Economist: Helmut Pastrick Deputy Chief Economist: Bryan Yu Senior Financial Economist: David Hobden Production: Judy Wozencroft Regional Economist: Edgard Navarrette Economic Analysis of Ontario 14