The document provides an economic outlook and analysis for various regions including globally, the US, Canada, and Ontario. It summarizes recent economic growth trends, risks, currency movements, housing, labor, and other indicators. Growth is expected to remain modest globally and many regions face challenges from slowing emerging markets, currency appreciation, weak commodity prices, and lack of pent-up consumer demand. [END SUMMARY]

1. THE ECONOMIC OUTLOOK
October 2015
Leslie Preston
Economist
TD Economics

2. GLOBAL GROWTH DISAPPOINTS AGAIN,
MODEST OUTLOOK AT BEST
3.1
3.4 3.5
0
1
2
3
4
5
6
2003 2005 2007 2009 2011 2013 2015 2017
World GDP growth; annual average percent change
Source: IMF. Forecast by TD Economics as at September 2015.
Forecast

3. ROTATION OF RISKS SHIFT TO DEVELOPING
WORLD
2.0
3.5
-1
0
1
2
3
4
5
6
7
2003-07 2008-10 2010-14 2015-17F
Advanced Developing ex-China
Source: IMF. Forecast by TD Economics.
Y/Y % Chg.
Forecast
3

4. CHINA SLOWDOWN FAR FROM OVER
2
4
6
8
10
12
14
2001 2003 2005 2007 2009 2011 2013 2015F 2017F
Actual
Target (2015 is 7.0%)
Source: China National Bureau of Statistics, Haver Analytics, TD Economics. As at September 2015.
Real GDP, Y/Y % Chg.
Forecast
4

5. RISE IN CREDIT = DOMESTIC REVIVAL IN THE
EURO AREA
5
-1
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
1999 2001 2003 2005 2007 2009 2011 2013
Real GDP (lhs)
Bank loans to the private
sector* (rhs)
Source: ECB, TD Economics. As at September 2015. *adjusted for sales and securitizations.
Y/Y % Chg., monthly difference in Y/Y % change,
6mth MA

6. 6
U.S. ECONOMY RETURNS TO SOLID GROWTH
2.5 2.6
2.4
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
2008 2009 2010 2011 2012 2013 2014 2015F 2016F 2017F
Forecast by TD Economics as of September 2015.
Source: Bureau of Economic Analysis.
Real GDP Growth (U.S.)
Forecast

7. 7
U.S. DOLLAR HAS SURGED TO MULTI-YEAR HIGHS
80
85
90
95
100
105
110
115
120
125
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Broad
vs. Major currencies
vs. Other Important Trading Partner (OITP) currencies
Source: Federal Reserve Board, Haver Analytics, TD Economics. As at September 2015.
Real trade-weighted US dollar (2014-Q2=100)

8. 8
CURRENCY MOVEMENTS IMPACT U.S. LESS THAN
OTHERS
0
5
10
15
20
25
30
35
40
45
50
Germany EU 17 Mexico Canada UK Japan US
Source: Haver Analytics, data for 2014. *Nominal terms.
Exports of Goods and Services as a % of GDP*

9. 9
LABOUR MARKET PROGRESS CANNOT BE IGNORED
3.3
3.0
3.2
2.1
-1.4
-0.6
-0.1
2.0
2.4
2.1
1.2
-2.8
-5.6
0.8
2.0
2.2
2.5
2.9
2.6
-6
-5
-4
-3
-2
-1
0
1
2
3
4
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015F
Source: Bureau of Labor Statistics, TD Economics.
Nonfarm payroll growth; fourth quarter-over-fourth quarter , millions

10. 10
U.S. HOUSING STILL HAS LOTS OF ROOM TO GROW
0
500
1,000
1,500
2,000
2,500
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016
Demographically adjusted households + depreciation
Housing starts
Housing starts (units, 000s); change in households (000s)
Source: U.S. Census Bureau, TD Economics. Forecast as at September 2015. .
Fcst.

11. 11
CONSUMERS RESPONDING TO JOB GAINS AND LOW
RATES
6
8
10
12
14
16
18
20
1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
U.S. light vehicle sales (millions)
Source: Bureau of Economic Analysis, TD Economics

12. FED TO EMBARK ON LIFTOFF SLOWLY
0
1
2
3
4
5
6
7
2000 2002 2004 2006 2008 2010 2012 2014 2016
Federal Funds Rate
10-yr Treasury Yields
Source: Federal Reserve Board, Forecast by TD Economics as at September 2015.
Percent
Forecast

13. 13
CANADIAN ECONOMY HITS A POT HOLE
1.2
2.0 1.9
-4
-3
-2
-1
0
1
2
3
4
2008 2009 2010 2011 2012 2013 2014 2015F 2016F 2017F
Canada real GDP growth; annual average percent change
Source: Statistics Canada. Forecast by TD Economics as of September 2015.
Forecast

14. INVESTMENT TO REMAIN CHALLENGED BY SLOW
RECOVERY IN OIL PRICES
20
40
60
80
100
120
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Haver Analytics. Forecast by TD Economics as at September 2015.
West Texas Intermediate (WTI)
US$ per barrel
Forecast

15. NEGATIVE CANADA-U.S. BOND SPREAD TO
GROW
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2009 2010 2011 2012 2013 2014 2015 2016 2017
Overnight rate
Spread between CA 2yr - US 2yr bond yields
Source: Haver Analytics. Forecast by TD Economics as September 2015.
%
Forecast

16. CANADIAN DOLLAR TO WEAKEN FURTHER
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
US$/C$ (end of period)
Forecast
Source: Bank of Canada. Forecast by TD Economics as at September 2015.

17. 17
FX SENSITIVE SECTORS ARE STARTING TO
RESPOND TO LOWER LOONIE
90
95
100
105
110
115
120
125
130
135
140
Jan-2012 Jul-2012 Jan-2013 Jul-2013 Jan-2014 Jul-2014 Jan-2015 Jul-2015
Non-energy exports
FX sensitive
Non FX sensitive
Sources: Statistics Canada, Bank of Canada, TD Economics.
Note: 3-month moving average of exports are expressed in nominal terms.
index, Jan-2012 = 100

18. CONSUMERS STILL SPENDING AT A DECENT
PACE
18
9.8%
6.9%
5.5%
4.9%
4.5%
3.6% 3.3%
3.0% 3.0%
-0.1%
-0.7%
-2%
0%
2%
4%
6%
8%
10%
12%
BC ON NB CANADA PEI QC NL NS MB AB SK
Source: Statistics Canada, TD Economics.
Y/Y % Chg., (Jan-Jul 2015 vs. Jan-Jul 2014, nsa), Retal Sales Ex-gasoline

19. HOUSEHOLD SPENDING LACKS PENT-UP
DEMAND
0
20
40
60
80
100
120
140
160
180
1990 1993 1996 1999 2002 2005 2008 2011 2014 2017
U.S.
Canada (comparable to U.S.)
%, Household Debt-to-Personal Disposable Income*
Source: Statistics Canada, Haver Analytics, TD Economics. *Credit market household debt.
19

20. CANADIAN HOUSING ACTIVITY TO MODERATE
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
2000 2002 2004 2006 2008 2010 2012 2014 2016
ON & BC
Rest of Canada
Source: CREA. Forecast by TD Economics.
Y/Y % Chg. (3-month moving average) - Simple average of prices
Fcst.

21. COMMODITY-SHIELDED PROVINCES TO LEAD
THE WAY IN ECONOMIC GROWTH
0.0 0.5 1.0 1.5 2.0 2.5 3.0
Alberta
Saskatchewan
Atlantic
CANADA
Quebec
Ontario
Manitoba
British Columbia
Avg. 2015-17F
Source: Forecast by TD Economics as of September 2015.
Real GDP Growth Y/Y % Chg.

22. ONTARIO FALLS BEHIND IN EXPORTS
AND MANUFACTURING
22
40
50
60
70
80
90
100
110
120
130
140
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
BoC Foreign Activity Index
Ontario real Intern. Exports
Ontario manufacturing real GDP
Source: Ontario Economic Accounts and Bank of Canada.
Index, 2002 = 100

23. DEMOGRAPHICS SIGNAL LONG RUN
CHALLENGES
23
0.5
1.0
1.5
2.0
2.5
3.0
1972 1980 1988 1996 2004 2012 2020 2028 2036
Ontario
Canada
Source: Haver Analytics and Statistics Canada population projections, M1 scenario.
Population growth, %

24. ONTARIO GOVERNMENT FACING
LARGE DEFICTS
24
0
5
10
15
20
25
30
35
40
45
-3.5
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
01-02 03-04 05-06 07-08 09-10 11-12 13-14 15-16f
Budget Balance (left scale)
Net Debt (right scale)
Source: 2015 Federal Fiscal Reference Tables and 2015/2016 Government Budgets & Fiscal Updates.
% share of Nominal GDP% share of Nominal GDP

25. ONTARIO GDP BY INDUSTRY
25
-0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5
Public Services*
Manufacturing
Acc. & Food Services
Total
Transp. & Warehousing
Wholesale Trade
Retail Trade
Construction
2015F
2016-17F
*Includes the public administration, health care and social assistance and educational services.
Forecast by TD Economics as at October 2015.
Average Annual % Change real GDP

26. LOCAL LABOUR MARKET MAKING PROGRESS
4
6
8
10
12
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
Canada Ontario St. Cath-Niagara*
Source: Canada Census, Haver Analytics. Forecast by TD Economics as at October 2015.
* 2015 figure is year-to-date average.
Forecast
Unemployment rate, %

27. ONTARIO & WELLAND HOUSING
MARKET
27
-4
-2
0
2
4
6
8
10
12
2000 2002 2004 2006 2008 2010 2012 2014 2016
Welland*
Ontario
Source: The Canadian Real Estate Association. Forecast by TD Economics as at October 2015.
*2015 shows price gains YTD.
Home Prices, Y/Y % Chg.
Forecast

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