Daily Financial Updates

Forecast sees no recession in Ontario

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Increased construction costs push up price of new homes

March 12, 2008
The Canadian Press-OTTAWA
The cost of new housing accelerated for the second straight month in January. Nationally, builders' selling prices rose 6.5 per cent between January 2007 and January 2008, Statistics Canada said yesterday. Prices were up 0.6 per cent from December. The agency said the increase was due to increased costs for material and labour, as well as strong market conditions and increased demand for land. Prices in the Kitchener census metropolitan area rose 2.4 per cent on a year-over-year basis and 1.3 per compared to December.

Forecast sees no recession in Ontario
Maria BabbageThe Canadian Press-TORONTO
Ontario won't slide into a recession despite the expectation of additional manufacturing layoffs in the "near future,'' the Conference Board of Canada said yesterday.
A soaring Canadian dollar and slowing U.S. market will continue to plague the province, where the economy is expected to grow 2.1 per cent this year and 2.9 per cent in 2009, the board said in its provincial economic forecast report.
Those predictions are higher than most forecasts put forward by big bank economists and Finance Minister Dwight Duncan, who is projecting growth of 1.2 per cent this year and 2.3 per cent in 2009.
The board's outlook is more optimistic because it's not predicting a U.S. recession, said Mari-Christine Bernard, associate director of the board's provincial reports .
"It's no surprise that weakness in the U.S. economy will challenge the manufacturing sector in Ontario,'' she said. "If it's a lot weaker than what we predict, yes, the 2.1 per cent might be on the high side.''
Ontario is still on track to post a surplus this year, said a spokesperson for Duncan, who will table the next provincial budget March 25.
"Going forward, we will be cautious in our growth and revenue forecasts recognizing that both Ottawa and B.C., are predicting real declines in revenues for the coming year,'' said Steve Erwin.
Ontario and Quebec "will be challenged by the sombre outlook in the United States -- although neither province is expected to slip into recession,'' the report said.
Planned auto production cuts and delays in operations at the new Toyota plant in Woodstock, Ont., will "significantly hinder'' export growth in Ontario, according to the board's outlook.
"Until the U.S. economy gets back on its feet, we're going to see a weakness in the manufacturing sector in Ontario,'' Bernard said.