Ontario economy rebounds modestly in third quarter

Mon Jan 16, 2012 3:39pm EST
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By Claire Sibonney

TORONTO (Reuters) - Ontario's economy expanded modestly in the third quarter, overcoming a slight decline in the prior quarter and steering Canada's manufacturing heartland further away from the threat of another recession.

An Ontario government report released on Monday showed the economy of Canada's most populous province grew by 0.7 percent in the July-September period, reversing a 0.2 percent second-quarter slide.

The province, which relies heavily on the shipment of autos and parts to the United States, saw exports rise 1.1 percent, while imports fell 0.6 percent. It also reported employment rose 0.7 percent in the quarter, with the jobless rate at 7.7 percent, down from 9.4 percent at the height of the global slowdown in May 2009.

"We've had a modest recovery. Unemployment remains too high. This is all about jobs in a growing economy and will be in the next budget. So there's more to do. We are not insulated from world conditions," Ontario Finance Minister Dwight Duncan told reporters.

He added however that Ontario's biggest concern is not Europe's debt crisis, but how the recovery plays out in United States, Canada's biggest trading partner by far and a key market for Ontario manufacturers.

Duncan said the third-quarter data should lead to 2011 real growth of 2.7 to 2.9 percent and noted gross domestic product above the pre-recession level.

Last quarter, the auto sector was hit hard by supply chain disruptions caused by the tsunami in Japan, thrusting Ontario - and Canada's economy as a whole - into contraction for the first time since the global financial crisis.

Statistics Canada reported in November that the country's economy recovered sharply in the third quarter.   Continued...