Troy Media – By Bryan Yu
Total housing starts in Ontario edged up 1.7 per cent from June to reach a seasonally-adjusted annualized rate (SAAR) of 72,900 units in July as increased multi-family activity offset a decline in single-detached starts.
Multi-family starts rose 8.9 per cent to 47,500 units while single detached activity fell 9.1 per cent to 25,400 units. Metro Toronto, which observed a 13 per cent increase in starts, largely drove July’s gain.
Total provincial housing starts have generally trended higher this year and over the first seven months of 2011 are ahead of last year’s pace. Through July, average SAAR starts were 65,500 units, up 11 per cent from the same period in 2010. However, gains have been a metro Toronto story as the average SAAR starts were 46 per cent higher at 41,600 units. In contrast, starts for the rest of the province were down 22 per cent over the same period.
Exports dip in June on autos
Ontario’s international merchandise exports slipped 3.3 per cent lower in June from May on a seasonally-adjusted basis. The decline was mainly in automotive products and in industrial goods and materials, largely metal ores. Taking into account price changes, June’s export volume decreased 3.5 per cent from May. On a year-to- date basis, merchandise exports were up 5.9 per cent to $75.7 billion this year while volume was up 4.8 per cent.
Supply chain disruptions in the automotive sector likely contributed to June’s 7.2 per cent drop in exports and will be unwound in the near term with a return to normal production in Japan. Automotive product exports so far this year are running close to even with the first half of last year but are expected to close out 2011 at a higher level.
The industrial goods and materials sector is also headed for a stronger performance in 2011 than in 2010 with exports up close to 24 per cent in the first half of this year due to high metal prices and demand.
Exports will make another important contribution to Ontario’s overall economic growth in 2011 though at a lesser rate than in 2010, which reflected the recession rebound. International merchandise exports during 2011 are forecast to rise five per cent in current dollars and four per cent in volume or price-adjusted. The export outlook for 2012 has turned less positive given recent developments in the U.S. and a downgrade of its 2012 growth expectations. A Canadian dollar above parity with the U.S. dollar is highly likely and will offer no relief for exporters.
Bryan Yu, Central 1 Credit Union
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