2011-2012 Economic Outlook:
Despite a very challenging external environment, Canada’s economy has outperformed its G7 peers in many respects. It weathered the financial and economic crisis better than most industrialized countries and it staged an impressive turnaround. Real GDP grew 4.9 per cent (annualized) in the final quarter of 2009 and a resounding 5.6 per cent in the first quarter of 2010, fueled by a strong rebound in consumer spending, residential investment and government expenditures.
After the sharp bounce back, Canada’s economy lost some of its swagger, expanding at a sluggish 2.3 per cent annual rate in the second quarter of 2010 and a meager 1.0 per cent in the third quarter. Additionally, the pace of job creation slowed considerably in the second half of the year.
In the first six months of 2010, employment growth averaged 51,400 per month. In the July to November period, employment gains averaged 7,620 per month.
To be sure, recessions that are associated with financial crises or that are highly synchronized have historically been followed by weak recoveries. The most recent recession was associated with both, creating a perfect storm. In 2011, strong headwinds—sluggish U.S. growth, the persistent strength in the Canadian dollar, faltering domestic demand and the waning impact of prior fiscal and monetary stimulus—will hold back GDP growth. Overall, Canada’s economy is projected to expand a modest 2.4 per cent (yearover-year) in 2011, following an estimated 2.9 per cent gain in 2010.
In 2012, the economy is forecasted to grow about 2.7 per cent, reflecting somewhat stronger domestic fundamentals and better growth prospects in the United States, Canada’s principal export market. As with all forecasts, ours are subject to a considerable degree of uncertainty and risk.
Read the whole article here www.kmggold.ca/blog/publications/Economic_Outlook_2011.pdf
The Canadian Chamber of Commerce is committed to fostering a strong, competitive and profitable economic environment that benefits all Canadians. This paper is one of a series of independent research reports covering key public policy issues facing Canada today. We hope this analysis will raise public understanding and help decision-makers make informed choices.
The papers are not designed to recommend specific policy solutions, but to stimulate public discussion and debate about the nation’s challenges.