TORONTO - Ontario's battered economy picked up in the third quarter of 2009, the first gain since it sputtered into recession.
The province's real gross domestic product increased 0.5 per cent from July to August, largely due to improvements in the auto sector, Ontario's Ministry of Finance reported Thursday.
That surpassed Canada's real GDP, which rose 0.1 per cent in the same period. The U.S. economy rose 0.6 per cent in the third quarter.
Ontario's growth follows four consecutive quarters of declines, including a drop of 1.0 per cent from April to June.
It's a good start, but Ontario isn't out of the woods yet, said TD economist Derek Burleton.
"Until many of the industries begin to make up a significant amount of the ground lost, it's hard to claim victory," he said.
Job numbers haven't turned around either, he noted.
According to Statistics Canada, Ontario lost an estimated 16,600 jobs in December. It gained 2,000 full-time jobs but lost 18,600 part-time positions. However, the unemployment rate was unchanged at 9.3 per cent.
The job numbers show that unemployment remains at a high level, said Alicia Johnston, a spokeswoman for Ontario Finance Minister Dwight Duncan, who was unavailable for comment.
"While this modest growth in Ontario's economy is encouraging news, our families and businesses are still feeling the effects of the global downturn," she said.
The ministry said Ontario's third-quarter growth reflected gains in all major spending areas, including consumer, business investment and government expenditures.
Consumer spending rose one per cent in the third quarter, as more people purchased vehicles, furniture and appliances, clothing and footwear and natural gas, it said.
Spending on motor vehicles and parts increased 5.7 per cent during the three-month period.
Auto production is still almost 50 per cent below levels posted at the beginning of 2007, the ministry said.
However, auto industry output grew 16.8 per cent in the third quarter, as several assembly lines resumed production following a big market downturn in the second half of 2008.
Business investment on plant and equipment rose 7.6 per cent. Exports also increased 4.2 per cent and imports rose 6.5 per cent following three consecutive quarters of declines.
Residential construction investment spending rose 0.6 per cent, following a 0.8 per cent gain in the second quarter. Spending on new housing construction slipped 11.2 per cent -- the seventh consecutive quarterly decline -- while renovation activity surged 5.8 per cent.
