Ontario economic growth to benefit from stronger U.S. Demand: RBC Economics

March 20, 2012
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A Royal Bank of Canada sign marks its former head office in downtown Toronto on Dec. 2, 2011. THE CANADIAN PRESS/Nathan Denette
A Royal Bank of Canada sign marks its former head office in downtown Toronto on Dec. 2, 2011. THE CANADIAN PRESS/Nathan Denette

TORONTO - A report issued today forecasts an upturn in the United States will contribute to a modest rebound in economic growth in Ontario this year.

The report from RBC Economics cites stronger U.S. demand for Ontario's exports and renewed strength in capital spending at the municipal and regional level as contributing factors.

The bank says stronger U.S. demand will be fuelled by a strengthening American labour market that will drive stronger auto sales.

That will boost demand for Ontario-made vehicles and parts.

RBC projects real GDP growth of 2.5 per cent in 2012, up from an estimated 1.9 per cent in 2011.

That's on par with the national projection of 2.6 per cent GDP growth this year.

"The recent encouraging developments in the U.S. economy are welcome news in Ontario and for the auto industry in particular," said Craig Wright, RBC senior vice-president and chief economist.

"Ontario's economy relies disproportionately on the U.S. market and this turnaround in the automotive sector will play an important role in boosting provincial exports."