Statscan has released its numbers for fourth quarter GDP growth for the country and while the number 0.8% annualized may have been slightly better than expected, it was by no means good. For one thing population growth is more than 0.8% yearly in Canada, so on a per capita basis, GDP decreased slightly.
This Bloomberg article does a good job of looking at the underlying weakness.
"Although growth beat expectations, the details suggest a weak
recovery. The most significant contribution to the fourth-quarter
expansion was an 8.9 percent drop in imports, the largest such decline
since the first quarter of 2009. That was the result of the Canadian
dollar depreciating 7.5 percent over the last 12 months, making foreign
imports such as electronics more expensive.
The
weaker currency failed to generate stronger exports, however. Shipments
abroad fell 2.2 percent, the fourth decline in five quarters. If
imports fall faster than exports, GDP expands. Business investment also
shrank by 6.5 percent, the fourth straight drop.
The details of
the report were “unambiguously bad,” David Tulk, chief Canada macro
strategist at TD Securities in Toronto, wrote in a research note. The
fourth-quarter result, and signs growth will exceed 1 percent from
January to March “will cement the Bank on the sidelines at least through
to the second half of the year,” he said."
The fact that exports declined even with a low dollar isn't good at all. It is true that a lot of that export weakness could have been petrochemical related, but for Ontario it would seem that exports can't be that great.
In terms of what Ontario's GDP could be, in the third quarter Ontario's GDP was a strong 3.5% annualized versus 2.3% overall for the country. With the country only having 0.8% growth in the third quarter, it seems unlikely that Ontario could generate 3.5% growth in the fourth quarter again.
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