: Ontario Economic Accounts - First Quarter of 2016

First Quarter of 2016
(January, February, March)
Ontario Ministry of Finance

Table of Contents

Highlights

Ontario Real GDP Rises in 2016Q1

  • Ontario’s real gross domestic product (GDP) advanced 0.8% (3.0% annualized) in the first quarter (January to March) of 2016, after rising 0.8% (3.3% annualized) in the fourth quarter (October to December) of 2015.
  • Increases in exports and household spending were the primary drivers of Ontario’s first quarter gain in real GDP.
  • Nominal GDP increased 0.7% (2.8% annualized) in the first quarter. Compensation of employees rose 0.7%, while the net operating surplus of corporations increased 1.2%.
  • Economic production, measured on an industry basis, advanced 0.9% (3.7% annualized) in the first quarter. Output in the goods sector rose 1.4%, while service sector activity grew by 0.8%.
  • Employment in Ontario continues to rise, while other economic indicators also point to continuing growth.
  • Ontario posted stronger first quarter real GDP growth than Canada, the U.S. and all of the other G7 countries.
  • Ontario’s economy has continued to grow in an uncertain economic environment. Expectations for global economic growth have moderated in recent weeks due to the results of the Brexit referendum.

Expenditure Details

Household Spending and Exports Boost Ontario’s Real GDP

Ontario’s real GDP increased 0.8% in the first quarter of 2016, reflecting positive contributions from household spending, investment in residential structures and exports. This was partially offset by lower capital spending on machinery and equipment and non-residential construction, as well as a decline in business inventories.

Ontario household consumption spending increased 0.6%, following a 1.3% advance in the fourth quarter of 2015. The first quarter increase was driven by solid gains in durable goods (+2.6%), semi-durable goods (+1.7%), and services (+0.6%). Durable goods spending continued to be boosted by purchases of motor vehicles, which rose for the fourth consecutive quarter.

Business investment advanced by 0.8%. This was led by a 2.7% gain in residential construction investment, which expanded for the fifth consecutive quarter. Stronger investment in new housing and increased home ownership transfer spending, which reflects movement in the home resale market, contributed to the gain. Business investment in non-residential structures (-1.6%) and machinery and equipment (-0.4%) declined in the quarter. First-quarter growth was also dampened by a $2.3 billion reduction in business inventories.

Exports rose by 1.7%, rising for the fourth consecutive quarter. Higher exports of automotive products and consumer goods led the first-quarter gain. The lower Canadian dollar continues to support growth in Ontario’s exports. After a modest 0.2% increase in the fourth quarter, imports advanced 1.4% in the first quarter.

Income Details

Nominal GDP Rises

GDP in current dollars increased 0.7% in the first quarter, following a 0.9% advance in the fourth quarter of 2015.

Supported by job gains, compensation of employees, which includes both wages and salaries, and supplementary labour income, rose 0.7%, following a 1.3% advance in the previous quarter. Similarly, net mixed income, which is composed of farm, non-farm and rental income, advanced 1.0%, following a 1.1% increase in the fourth quarter of 2015.

Business sector profits, measured by net operating surplus of corporations, increased 1.2% in the first quarter of 2016, partially recovering from a 1.5% decline in the previous quarter.

Household disposable income increased 0.9%, after rising 1.1% in the fourth quarter of 2015.  

While household disposable income increased at a moderate pace, advances in consumption expenditure and a decline in pension entitlements led to a slight slowing in the household savings rate to 1.0%, from 1.1% in the previous quarter.

Price Details

Economy-Wide Prices Edge Down

Economy-wide prices, as measured by the implicit price index for GDP, edged down 0.1%, after rising 0.1% in the fourth quarter. The implicit price index for final domestic demand increased 0.4%, after rising at an identical pace in the fourth quarter of 2015.

Prices for household expenditures increased 0.2%, after advancing 0.3% in the fourth quarter of 2015.  Prices for motor vehicles, electricity and food increased, but were partially offset by lower natural gas and gasoline prices.

Machinery and equipment prices increased 1.1%, while non-residential construction prices rose 0.6%. Residential construction prices advanced 2.8%, the largest increase since early 2004.

Import prices rose 0.3%, while export prices declined 0.2% in the first quarter, both influenced by depreciation in the Canada-U.S. exchange rate.

Industry Details

Growth Widespread Across Sectors

Based on production by industry, Ontario real GDP expanded 0.9%, matching growth in the previous quarter. Both the goods (+1.4%) and service (+0.8%) industries contributed to first quarter growth.

Within the goods-producing sector, manufacturing (+1.2%) was the main driver of growth. The auto industry posted a 3.1% gain, with increased output in both auto assembly and parts. Food, beverage and tobacco manufacturing rebounded 3.7% following a 1.1% decline in the final quarter of 2015. Partially offsetting these gains were declines in machinery (-2.1%), chemical and petroleum (-1.2%) and paper products and printing (-1.0%).

Other goods-producing industries also mostly increased output. Construction output advanced 1.2% in the first quarter, with gains in both residential (+2.6%) and non-residential (+0.1%) buildings. The utilities sector posted a 5.6% gain, following three consecutive quarterly declines. Output in primary industries declined by 0.7%. This included a 0.5% decrease in mining due to weaker output in support activities and gold and silver production.

Almost all service industries increased output in the first quarter. The largest contributor was the finance and insurance industry, up 1.3%, supported by strength in banking. Retail trade advanced by 1.7%, with strong contributions from auto dealers and clothing stores. Wholesale trade rose 1.0%, supported by gains in machinery and equipment wholesalers. Public sector services were also a strong contributor to growth in the quarter with gains in health care and social services (+1.2%) and education (+1.3%), while public administration edged up by 0.2%.

Employment

Job Growth Continues in 2016

Ontario employment has advanced considerably since the 2008-09 recession. In June 2016, employment was 5.3% (+352,600 jobs) above the pre-recession peak and 9.8% (+625,100 jobs) above the recessionary low.

So far in 2016, job creation has been steady. On a year-to-date basis, Ontario’s employment advanced 1.2% during the first six months of 2016, compared to the same period in 2015.

Since the recessionary low, the majority of jobs created were full-time positions (+599,400), while part-time employment (+25,600) also increased. Most of these net new jobs were in the private sector (+446,600) and in industries paying above–average wages (+478,900).

Ongoing job gains have led to a steady reduction in Ontario’s unemployment rate, which has now been below the national average for over a year. As of June 2016, Ontario’s unemployment rate was 6.4%, below the Canadian rate of 6.8%.

Trade

Growth Continues in Exports, Manufacturing Sales

Ontario’s international merchandise exports advanced 12.6% in the first five months of 2016 compared to the same period in 2015. This increase was led by exports to the United States, supported by solid growth in the U.S. economy and a more competitive Canadian dollar, which depreciated 7.7% against the U.S. dollar over the same time period.

Manufacturing sales advanced 8.3% on a year-to-date basis to April, led by transportation equipment and food product manufacturing.

Retail sales advanced 7.8% and wholesale trade by 7.4% compared to the first four months of 2015. Both wholesale and retail trade benefited from solid gains in the motor vehicle and parts industries.

Housing

Ontario’s Housing Market Still Growing Strongly

Housing market activity in Ontario continues to be strong.

Sales of existing homes were 10.3% higher in the first five months of 2016, compared to the same period in 2015. This strength was broad based, with all regions of Ontario posting year-to-date gains.

Average home resale prices have also been on the rise, reaching $516,000 in May. During the first five months of 2016, average home resale prices were 12.1% higher than the previous year. The upward trend has been in part the result of declining listings. New listings have decreased 6.8% on a year-to-date basis. 

 

Housing starts advanced 15.4% in the first six months of 2016. Both single-detached and multiple-family starts increased on a year-to-date basis.

Jurisdictional Comparisons

Ontario Tops Real GDP Growth Across the G7

Ontario posted stronger quarter-over-quarter real GDP growth (+0.8%) than Canada, the United States and all of the other G7 countries in the first quarter of 2016.

Across the G7 countries, economic growth generally improved in the first quarter of 2016 compared to the previous quarter. Germany led the G7 in economic growth, with real GDP rising 0.7%. France posted a 0.6% gain, following a 0.4% rise in the fourth quarter of 2015. After contracting 0.4% in the previous quarter, Japan’s economy grew 0.5% in the first quarter. The United Kingdom posted a 0.4% increase, slowing from a 0.7% advance in the fourth quarter. Italy’s economic growth rebounded slightly to 0.3%, breaking the downward trend in real GDP growth throughout 2015.

Canada wide, real GDP rose 0.6% in the first quarter, after edging up 0.1% in the fourth quarter of 2015. The acceleration in economic growth was primarily attributed to increases in household expenditure (+0.6%) and net trade, as exports (+1.7%) grew more than imports (+0.3%). Business investment (-0.4%) continued to moderate national economic growth as investment in non-residential structures and machinery and equipment decreased 2.5%. Quebec recorded a 0.5% increase in real GDP, after recording no growth in the previous quarter. Household (+0.8%) and government (+0.3%) consumption both rose and were the main drivers of real GDP growth. Business investment (-1.1%) dampened Quebec’s economic growth for the tenth consecutive quarter.

In the U.S., real GDP advanced 0.3%, matching growth in the previous quarter. Personal consumption expenditure was the main contributor to growth, increasing 0.4%. Exports rose 0.1% in the first quarter, after declining 0.5% in the previous quarter.

Global Economic Developments

Global Economic Uncertainty Prevails

Expectations for an improvement in the global economy in 2016 have eased in recent months. In April, the IMF lowered their world growth forecast from 3.4% to 3.2% in 2016 due to weakness in both advanced and emerging economies. The slowdown has been evident in markedly slower growth in global trade flows due, in part, to financial uncertainty and capital outflows from China. The slowdown in global trade has been exacerbated by commodity-related weakness in Russia, the Middle East and Africa.

Global growth expectations will likely be revised lower following the results of the Brexit referendum which saw the United Kingdom vote to leave the European Union (E.U.). Since then, global uncertainty and financial market volatility increased markedly, causing significant declines in global bond yields and a strong appreciation in the U.S. dollar. Most forecasters expect the impact of Brexit to be felt more strongly within the E.U. and among countries with significant trade ties to the region. Due to more limited financial and trade ties, the U.S. and Ontario will likely experience a modest impact.

Following a slow start to the year, real GDP growth in the U.S. will likely improve in the second quarter, boosted by a rebound in consumer spending and signs of a return to growth in exports. Weakness in the energy sector is expected to continue weighing on business investment while conditions in the U.S. labour market remain tight. In June, payrolls added 287,000 jobs while the unemployment rate was 4.9% and wage growth accelerated.

After falling to 14-year lows last February, oil prices have risen to over $45 US per barrel in July, supported by escalating production cuts in the U.S. and supply disruptions in Alberta and other parts of the world. The recent price recovery is unlikely to reverse the dramatic reduction in investment and production in the North American oil sector. As well, excessive global oil inventories signal the reduction in North American oil supply is not yet over.

Rising oil prices, in addition to recent monetary policy developments, raised the value of the Canadian dollar. As of late-June, it has risen by over 11% to 78 cents US from below 70 cents US in mid-January. The Canadian dollar has experienced a stronger appreciation against the British pound and the euro on concerns related to the outcome of the Brexit referendum.

Canadian interest rates have remained low in 2016, with the Government of Canada 10-year bond yielding around 1.2% so far this year, down from 1.5% in 2015. The decline has been a global phenomenon with government 10-year bond yields hitting all-time lows in the United Kingdom, and falling below zero in Germany, Japan and Switzerland.  In addition to slower economic growth and Brexit-related uncertainty, a key factor in the decline in global bond yields has been persistently low inflation and falling inflation expectations. In the U.S., CPI inflation was 1.0% in May from a year-earlier while inflation in the euro area, the UK and Japan has been close to 0.0%.

Following the temporary downturn early in 2016, equity markets bounced back with the TSX rising over 8%, while the S&P 500 is up over 4% since early January. However, since mid-April both indices have been little changed despite modestly elevated volatility in financial markets around the Brexit vote. In China – a source of financial market disruption in 2015 – significant government intervention has maintained relative stability in equity markets so far this year.

International geopolitical risks remain elevated. Low commodity prices have contributed to high inflation and prolonged recessions in Brazil and Nigeria while Venezuela faces significant economic challenges. In China, though financial markets have stabilized after a turbulent 2015, significant capital outflows pose a risk to global financial market stability.

In Focus

A Closer Look at Ontario’s International Exports

In today’s highly interconnected world, global supply chains are crucial in international trade flows. With the on-going changes in the global supply chains, the destination and composition of Ontario’s exports are continuously evolving.

Over the past decade, Ontario’s export growth continued despite a generally challenging global economic environment. In addition to a relatively high Canadian dollar, the global market has become increasingly competitive as a result of the growing importance of emerging economies. While the U.S. remains Ontario’s primary foreign market, receiving 80.5% of the province’s merchandise exports in 2015, this is down from 88.8% in 2005. Ontario has sent an increasing share of its exports over this time to the United Kingdom, Mexico, China and Hong Kong.

Ontario’s merchandise exports have not only become more diverse in terms of export destinations, but have also changed in terms of the composition of products. In 2005, the top two categories – automotive and machinery and equipment products – accounted for about 57% of total goods exports. In 2015, these two sectors accounted for just over 48% of total goods exports. Over the same period, exports of high-tech products, such as aerospace and pharmaceuticals, grew by nearly 50%, increasing their share of total exports to 6.3% in 2015 from 4.7% in 2005.

Goods continue to make up the bulk of Ontario’s exports, but services are now playing a more prominent role. During the 2008-2009 global recession, Ontario’s international goods exports experienced a steep decline, while international service exports continued to grow. This resulted in the services share of total international exports growing from 14.9% in 2008 to nearly 19% by 2009. This share would increase further to 19.7% by 2012, but has since edged down to 17.5% in 2015. While service exports once had limited global exposure, technological advances and the digitization of the economy mean services will continue to play an important role in Ontario’s economy.

Appendix

How GDP is Measured

The Ontario Economic Accounts provide measurements of GDP using three different methodologies: by expenditure, income and industry.

The GDP by expenditure approach defines GDP as the aggregate of all expenditures on final consumption, gross capital formation and net trade by consumers, governments and businesses that occur within Ontario’s economy over a given time period. This measurement of GDP can also be defined as the sum of consumer spending, gross investment, government spending and net trade.

The GDP by income approach equates GDP to the total income earned through contributions to production within Ontario’s economy by labour and capital over a given time period. That is, GDP is the sum of all wages and salaries paid to employees, the gross operating surplus of businesses, gross mixed income and indirect taxes less subsidies.

The GDP by industry approach measures GDP by calculating the total output of the goods and services producing industries within Ontario’s economy and subtracting the cost of intermediate inputs used in final production. This approach can also be referred to as the value-added approach as it quantifies the additional value generated by industries through the production of final products within the economy.

For a full list of definitions used in the Ontario Economic Accounts, please see Statistics Canada’s System of Macroeconomic Accounts Glossary at http://www.statcan.gc.ca/eng/nea/gloss/gloss_a.

List of Data Tables

Income and Expenditure Data

Quarterly Data, 2013:1–2016:1

Table 1: Ontario Gross Domestic Product (Income-Based)
Table 2: Ontario Gross Domestic Product (Expenditure-Based)
Table 3: Ontario Gross Domestic Product at Chained 2007 Prices
Table 4: Sources and Disposition of Ontario Household Income
Table 5: Ontario Trade
Table 6: Ontario Trade (Chained 2007 Prices)
Table 7: Ontario Deflators

Annual Data, 2012-2015

Table 8: Ontario Gross Domestic Product (Income-Based)
Table 9: Ontario Gross Domestic Product (Expenditure-Based)
Table 10: Ontario Gross Domestic Product at Chained 2007 Prices
Table 11: Sources and Disposition of Ontario Household Income
Table 12: Ontario Trade
Table 13: Ontario Trade (Chained 2007 Prices)
Table 14: Ontario Deflators

Ontario Production by Industry at 2007 Prices

Table 15: Quarterly Data, 2013:1-2016:1
Table 16: Annual Data, 2012-2015

Historical tables, both annual and quarterly available from 1981.
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Graphic Descriptions

Ontario GDP, First Quarter 2016

The chart indicates the change in real and nominal GDP in the first quarter of 2016. Real GDP rose 0.8%, while nominal GDP increased 0.7% in the quarter.

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Real GDP Growth

The bar chart illustrates Ontario’s quarterly real GDP growth in per cent from the first quarter of 2013 to the first quarter of 2016. Ontario has experienced real GDP growth over the entire period. Real GDP rose 0.8% in the first quarter of 2016, following a 0.8% increase in the fourth quarter of 2015. The third quarter of 2014 recorded the strongest gain of 1.1% and the first quarter of 2015 recorded the weakest gain of 0.2%.

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Real GDP Change by Expenditure Component

The horizontal bar chart depicts the per cent change in Ontario’s real GDP and its components for the first quarter of 2016. Real GDP rose 0.8% in the quarter, with increases in household consumption (+0.6%), government (+0.1%), business investment (+0.8%), exports (+1.7%) and imports (+1.4%).

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Real Export and Import Growth

The bar chart shows the quarterly per cent change in real exports and imports from the first quarter of 2013 to the first quarter of 2016. Exports increased 1.7% in the first quarter of 2016, while imports rose 1.4%. Ontario’s exports have experienced four consecutive quarters of growth, and imports advanced for the second consecutive quarter. Growth in exports has outpaced growth in imports over the last four quarters.

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Nominal GDP Growth

The bar chart illustrates Ontario’s quarterly nominal GDP growth in per cent from the first quarter of 2013 to the first quarter of 2016. Ontario has experienced nominal GDP growth over the entire period. Nominal GDP rose 0.7% in the first quarter of 2016, slowing from a 0.9% increase in the fourth quarter of 2015. The third quarter of 2014 recorded the strongest gain of 1.8% and the second quarter of 2013 recorded the weakest gain of 0.1%.

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Nominal GDP Change by Income Component

The horizontal bar chart depicts the per cent change in nominal GDP and its components for the first quarter of 2016. Nominal GDP rose 0.7%, with increases in compensation of employees (+0.7%), net operating surplus (+1.2%), net mixed income (+1.0%) and indirect taxes less subsidies (+0.4%).

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Compensation of Employees Growth

The bar chart shows Ontario’s quarterly growth of employee compensation in per cent from the first quarter of 2013 to the first quarter of 2016. Ontario has experienced employee compensation growth over the entire period. Compensation of employees rose 0.7% in the first quarter of 2016, slowing from a 1.3% increase in the last quarter of 2015. The first quarters of 2013 and 2015 recorded the strongest gains (+1.7%) and the second quarter of 2013 as well as the last quarter of 2014 recorded the weakest gains (+0.3%).

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Economy-Wide Price Growth

The bar chart illustrates Ontario’s quarterly growth of economy-wide prices in per cent from the first quarter of 2013 to the first quarter of 2016. Ontario posted a 0.1% decline in economy-wide prices in the first quarter of 2016, the first decrease since the fourth quarter of 2014 when prices declined by 0.4%. The first quarter decline follows a 0.1% rise in prices in the last quarter of 2015. Since the first quarter of 2013, the strongest growth in prices was recorded in the first quarter of 2014 (+1.2%), while the largest decline was posted in the second quarter of 2013 (-0.5%).

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Price Change by Expenditure Component

The horizontal bar chart shows the per cent change in prices by expenditure component for the first quarter of 2016. The overall GDP deflator edged down 0.1%. Prices increased for household consumption expenditure (+0.2%), government (+0.1%), business investment (+1.9%) and imports (+0.3%), while export prices declined (-0.2%).

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Export and Import Price Growth

The bar chart illustrates Ontario’s quarterly growth of export and import prices in per cent from the first quarter of 2013 to the first quarter of 2016. In the first quarter of 2016, import prices rose 0.3%, while export prices declined 0.2%. Since 2013, import prices have experienced consistent growth, while export prices declined in the first quarter of 2016, fourth quarter of 2015, and the second quarter of 2013.

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Real GDP Growth by Industry

The bar chart depicts Ontario’s quarterly growth of real GDP by industry in per cent from the first quarter of 2013 to the first quarter of 2016. Ontario real GDP advanced 0.9% in the first quarter of 2016, matching the growth rate in the previous quarter.  Over the entire period, real GDP by industry has grown consistently, with the strongest gain of 1.1% recorded in the third quarter of 2014 and the weakest gain of 0.1% posted in the first quarters of 2014 and 2015.

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Real GDP Change by Industry

The horizontal bar chart illustrates the per cent change in real GDP by industry category for the first quarter of 2016. The output of all industries grew 0.9% in the quarter, with increased output from service industries (+0.8%) and goods-producing industries (+1.4%). The growth in output of each industry is as follows: health, education and public administration (+0.9%), wholesale and retail trade (+1.3%), finance and insurance (+1.3%), real estate, rental and leasing (+0.6%), transportation and warehousing (+1.1%), other services (0.0%), manufacturing (+1.2%), construction (+1.2%), utilities (+5.6%) and primary goods (-0.7%).

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Real GDP Change by Manufacturing Industry

The horizontal bar chart shows the per cent change in real GDP by manufacturing industry for the first quarter of 2016. In total, output by manufacturing industries rose 1.2% in the quarter. The growth in output of each manufacturing industry is as follows: wood and furniture (+4.0%), food, beverage and tobacco (+3.7%), transportation equipment (+2.5%), other manufacturing (+2.2%), plastic and rubber (+1.0%), electrical and electronic (+0.9%), primary and fabricated metal (+0.3%), paper and printing (-1.0%), chemical and petroleum (-1.2%), machinery (-2.1%) and textile, clothing and leather (-2.3%).

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Ontario’s Job Recovery from the Recession

The line chart shows the per cent change in employment compared to the pre-recession peak over the period of January 2008 to June 2016. Since the recessionary low in June 2009, Ontario’s employment has trended upwards. As of June 2016, employment in Ontario was 5.3% above the pre-recession peak.

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Employment Gains Concentrated in Full-Time, Private Sector, Above Average Wage Jobs

The bar chart shows different characteristics of Ontario employment gains since June 2009. Total employment increased by 625,000 since June 2009, with full-time employment up by 599,000, while part-time employment rose by 26,000. Private-sector employment increased by 447,000, while public-sector employment rose by 82,000 and self-employment was up by 97,000. Employment in above-average wage industries rose by 479,000 compared to a 146,000 employment increase in below-average wage industries.

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Unemployment Rate

The combination line and area chart show Ontario’s unemployment rate (line chart) and employment (area chart) from January 2008 to June 2016. Ontario’s unemployment rate has trended downwards since the recession, reaching 6.4% in June 2016. Employment in Ontario has risen steadily since the recession, surpassing the 7 million mark in June 2016, putting it well over the pre-recession level of roughly 6.6 million.

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International Merchandise Exports

The line chart shows Ontario’s international exports in billions of dollars from January 2013 to May 2016. Ontario’s international merchandise exports were relatively stable in 2013 before beginning an upward trend that continued until January 2016. After hitting a peak in January 2016, exports have trended downwards. On a year-to-date basis, Ontario’s international exports increased 12.6% over the first five months of 2016, compared to the same period one year ago.

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Manufacturing Sales

The line chart shows Ontario’s manufacturing sales in billions of dollars from January 2013 to April 2016. Ontario’s manufacturing sales have trended upwards since January 2013, with most of the growth occurring at the end of 2015 and beginning of 2016. Following the strong start to 2016, manufacturing sales declined significantly. On a year-to-date basis, Ontario’s manufacturing sales rose 8.3% over the first four months of 2016, compared to the same period one year ago.

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Retail Sales

The line chart shows Ontario’s retail sales in billions of dollars from January 2013 to April 2016. Ontario’s retail sales have steadily trended upwards since January 2013. On a year-to-date basis, Ontario’s retail sales rose 7.8% over the first four months of 2016, compared to the same period one year ago.

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Home Resales

The line chart shows Ontario’s home resales in units from January 2013 to May 2016. Ontario’s home resales have grown from over 16,000 units in January 2013 to over 20,000 in May 2016. In the beginning of 2015, home resales underwent a period of strong growth before leveling off for the rest of the year. Home resales have been trending up so far in 2016. On a year-to-date basis, Ontario’s home resales rose 10.3% over the first five months of 2016, compared to the same period one year ago.

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Home Resale Prices

The line chart shows Ontario’s average home resale prices in dollars from January 2013 to May 2016. Ontario’s home resale prices have grown from under $400,000 in January 2013 to nearly 550,000 in May 2016. On a year-to-date basis, Ontario’s home resale prices rose 12.1% over the first five months of 2016, compared to the same period one year ago.

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Housing Starts

The line chart shows Ontario’s housing starts in thousands of units (seasonally adjusted at annual rates) from January 2013 to June 2016. Ontario’s housing starts have exhibited a considerable amount of volatility, reaching a peak of almost 95,000 units in August 2015 and a low of roughly 41,000 in March 2014. On a year-to-date basis, Ontario’s housing starts rose 15.4% over the first six months of 2016, compared to the same period one year ago.

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Real GDP Growth, Selected Jurisdictions

The bar chart shows the quarterly per cent change in real GDP for all G7 countries, Quebec and Ontario for the first quarter of 2016. Ontario posted stronger quarter-over-quarter real GDP growth (+0.8%) than Canada, the United States and all of the other G7 countries. Germany (+0.7%), France (+0.6%) and Canada (+0.6%) followed right behind Ontario in real GDP growth in the first quarter. Japan and Quebec both posted real GDP growth of 0.5%, while the United Kingdom (+0.4%), Italy (+0.3%) and the United States (+0.3%) rounded out the rest of the G7 countries.

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Canadian Real GDP Growth

The bar chart shows the quarterly per cent change in real GDP for Canada from 2013 to the first quarter of 2016. Canada’s real GDP rose 0.6% in the first quarter of 2016, the third consecutive quarterly increase. In the first two quarters of 2015, Canada experienced a technical recession with two consecutive quarterly declines in real GDP. Real GDP grew in all quarters of 2013 and 2014.

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U.S. Real GDP Growth

The bar chart shows the quarterly per cent change in real GDP for the Untied States from 2013 to the first quarter of 2016. U.S. real GDP rose 0.3% in the first quarter of 2016, the eighth consecutive quarterly increase. Over the period covered in the chart, U.S. real GDP has grown every quarter with the exception of the first quarter of 2014 when real GDP declined by 0.2%. The second and third quarters of 2014 were the strongest quarters for the U.S., posting a 1.1% gain in each quarter.

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Global Growth

The combined bar chart shows the annual per cent change in real GDP for the world, advanced economies and emerging economies as defined by the International Monetary Fund for 2015, 2016 and 2017. The world economy grew 3.1% in 2015 and is expected to increase by 3.2% in 2016 and 3.5% in 2017. Advanced economies grew by 1.9% in 2015, and are expected to grow by 1.9% in 2016 and 2.0% in 2017. Emerging economies rose 4.0% in 2015, with forecasts predicting growth of 4.1% in 2016 and 4.6% in 2017.

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U.S. Payroll Growth

The combined bar and line chart shows monthly employment growth (bars) and the unemployment rate (line) for the United States from January 2015 to June 2016. Employment in the United States has grown consistently since January 2015, while the unemployment rate has trended downwards over the same period.

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Oil Prices

The line chart shows the daily WTI oil price in U.S. dollars per barrel from January 2015 to July 2016. In February 2016, oil prices declined to a low of approximately $26 US per barrel, but have since risen to over $45 US per barrel by the end of June.

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Canadian Dollar

The line chart shows the daily value of the Canadian dollar in U.S. cents from January 2015 to July 2016. The value of the Canadian dollar trended downward from about June 2015 to January 2016, when its value fell below 70 cents US. From there, the value of the Canadian dollar has ascended to about 78 cents US at the end of June.

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Government Bond Yields

The line chart shows the daily rate of 10-year government bonds from the U.S., Canada, United Kingdom and Germany from January 2015 to June 2016. All bond yields remained relatively flat in 2015, followed by a downward trend in 2016. Generally, government bond yields have been the highest in the United States, followed by Canada, the United Kingdom and Germany. German 10-year bond yields fell below zero at the end of June 2016.

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Stock Indexes

The line chart shows the daily value of the FTSE, S&P 500 and S&P TSX stock indexes from January 2015 to June 2016. All of the indexes represented in the chart follow a very similar trend, hitting their highest value around May 2015 before declining to their lowest values at the beginning 2016. Since then, equity markets have bounced back.

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Ontario Merchandise Exports

The combination bar and line chart illustrates Ontario’s total merchandise exports (line) and share of total exports to the U.S. (bars) from 2005 to 2015. Ontario’s total merchandise exports declined from 2005 until 2009, when it reached its recessionary low, and has steadily trended upwards ever since. The share of total exports to the U.S. was 88.8% in 2005 and declined steadily to 76.9% in 2011. Following the low point in 2011, the share of exports to the U.S. has increased gradually over time, reaching 80.5% in 2015.

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New Destinations for Ontario Merchandise Exports

The bar chart illustrates the share of Ontario’s merchandise exports destined for the United Kingdom, Mexico, Hong Kong and China in 2005 and 2015. In 2005, the shares of Ontario’s exports to the selected regions were as follows: 2.4% to the United Kingdom, 0.9% to Mexico, 0.3% to Hong Kong and 0.6% to China. In 2015, the shares of Ontario’s exports to the selected regions were as follows: 6.4% to the United Kingdom, 1.4% to Mexico, 1.3% to Hong Kong and 1.2% to China.

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Services Share of Ontario’s International Exports

The bar chart illustrates Ontario’s services share of international exports from 2005 to 2015. In 2005, the services shares of Ontario’s international exports was 13.5% and rose slightly above that level in 2008 to 14.9%, before experiencing a sharp increase in 2009 to 18.8%. From there, the services share of Ontario’s international exports remained fairly stable at over 19% until 2013, when it declined to 18.3% in 2014 and 17.5% in 2015.

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GDP measurement methods

  • Expenditure Approach
    • Sum of expenditures of all sectors of the economy
    • Consumer Spending + Investment + Government Spending + Exports – Imports
  • Income Approach
    • Sum of all incomes
    • Wage and Salaries + Profits + Mixed Incomes
  • Production Approach (GDP by Industry)
    • Sum of value added in all industry sectors
    • Output of Goods Producing Industries + Output of Services Producing Industries – Intermediate Inputs

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