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Nice charts, very informative. I agree with you that investment could be the main driver of growth going forward. Canadian corporations are unlevered relative to consumers, and Canadian manufacturers have gotten quite lean over the last few years, maybe they will help drive things.

"Looking into 2012, it's hard to see how or why consumption expenditures would play a larger-than-ordinary role in GDP growth. Given the concerns about household debt, another surge in durable goods expenditures is unlikely, even if interest rates stay low."

We've definitely been seeing a lot of weakness the last two or three quarters in the retail sector. TMX-listed stocks like Le Chateau, Reitmans, Rona, and Indigo have had a brutal time. While these are not durables, they are sensitive to credit-card deleveraging.


Statistics Canada also breaks GDP up by industry. Would be interesting to see you have a go at that.

Another very nice post. But you could have just as easily called it "Where will Canada's (output) growth go"? A similar presentation and discussion of the components from the table you cite provided by Statistics Canada might be a better match for your title...and would make another interesting post!

Thanks for showing that "barbarian" budget policy can still make a contribution to GDP stabilisation...

Oh, I wouldn't go that far. As I said, we'd need a counterfactual scenario for what would have happened in the absence of the stimulus package.

Stephen: We are grown-ups. From many declarations from Flaherty and others, we may infer a lot. With a majority in fall 2008, Harper would have sent us to European hell. That's my belief and I believe it. It might even be true...

Yes, it would take a certain amount of convincing before I'd believe that things would have been no different if the original Harper govt instinct to impose austerity at the beginning of a recession had become policy. But it's still a possibility that I'm not yet ready to rule out.

From a much less rigorous standpoint the fact that investment was forgone in the "recent" past due to trepidation concerning economic events leads us to expect that at least some of that investment will have be made at a later date.

However, this does presuppose that confidence returns.

More significantly, from a Canadian standpoint, our economic growth will be driven by whether or not our major trading partners grow. Let's not give our internal activities a higher level of import than they deserve.

So, to reposition, investment in the US was likely have lagged and could certainly provide a "stimulus" of its own if confidence returns to the US and international markets.

Flip a coin.

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