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Dodge predicts slowdown in Ontario
Niagara-on-the-Lake, Ont.—After several years of strong expansion, the US economy is cooling down, due to softer housing activity and declining demand for automobiles, said David Dodge, governor of the Bank of Canada, during a presentation to the 2006 Ontario Economic Leadership Summit in October.
Ontario, given its heavy integration with the US economy, will feel a significant impact from the US downturn throughout the second half of 2006 and the first two quarters of 2007.
Automotive products made up 44 per cent of Ontario’s merchandise exports last year, so it's clear the cooling in the US will affect Ontario more severely than other provinces.
But 70 per cent of Ontario's economy hinges on the service sector, which remains in good shape, Dodge said. For that reason, Ontario’s economy might under perform the Canadian average for the rest of the year and in 2007, but should still experience modest growth.
The slowdown in Ontario is not expected to last long, he added.
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