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Manufacturing the lead contributor to Ontario’s third quarter economic growth

Ontario’s economy showed a “modest” rebound in the third quarter of 2011 after a slight decline in the previous period, Finance Minister Dwight Duncan said.

Statistics released by the finance ministry showed Ontario’s real Gross Domestic Product rose 0.7 percent between July and September after falling 0.2 percent in the second quarter last year.

“It’s tracking at 2.7 percent annualized, and that’s pretty consistent with Canada for the same quarter,” Duncan told reporters.

“I don’t anticipate that we’ll go into negative growth again, certainly in the fourth quarter, but you never know.”

Manufacturing was the leading contributor to overall growth with a 2.2 percent increase in output, led by transportation equipment with a 6.4 percent hike in auto production.

That was a major turnaround after a 6.6 percent decline in auto production in the second quarter of 2011 because of supply problems caused by the tsunami in Japan.

The third-quarter figures show Ontario consumers continued to buy more auto parts, furniture, appliances, drugs, alcohol and other personal goods, but business investment was flat.

External trade also contributed strongly to Ontario’s growth in the third quarter of 2011 as exports advanced 1.1 percent, while imports declined 0.6 percent. Duncan called that “an important development” and good news for the province.

Investment in residential construction rose 5.2 percent in the second quarter. Spending on new housing construction jumped 5.7 percent, while renovation activity increased 6.2 percent.

Ontario’s unemployment rate is down to 7.7 percent and the province created 121,000 net new jobs in 2011, added Duncan.

“We’ve had a modest recovery (but) unemployment remains too high,” he said.