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Recently Coldwell Banker Peter Benninger Realty held our annual Economic Update in the Coldwell Banker theatre at 508 Riverbend Drive. During the two sessions held on February 4  Paul Ferley, the assistant chief economist of RBC Royal Bank, gave the audience his overview of the economic outlook for 2010.

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Gradual U.S. recovery good news for region, economist says

February 05, 2010 . BY CHUCK HOWITT, RECORD STAFF

KITCHENER - With Waterloo Region's economic recovery heavily dependent on what happens south of the border, the assistant chief economist of RBC Royal Bank brought some positive news to the region Thursday.

The U.S. is beginning to make a sustained economic recovery, but don't get out your wallets just yet. The rebound will be a gradual one, Paul Ferley told an economic outlook seminar at Coldwell Banker Peter Benninger Realty.

Thanks to aggressive government policy action and stimulus spending, the American economic engine is beginning to pick up steam, but that spending will eventually be pulled back, meaning that the private sector has to pick up the slack, he said.

With its heavy dependence on manufacturing, particularly in the auto sector, Waterloo Region got hammered even harder than Ontario as a whole during the economic downturn of 2008-09, Ferley said. The good news is that the region's economy will recover more quickly if business picks up in the U.S., he added.

Housing starts and building permit activity, while still below pre-recession levels, are beginning to recover in this area, and housing prices are starting to gain traction as well, though non-residential prices are still weak, Ferley said.

A key yardstick will be auto sales in the U.S. During the recession they fell to shockingly low levels of nine million units on an annual basis. Ferley is predicting they will climb back to the 12-million to 13-million level, which bodes well for Ontario and even more so for Waterloo Region.

"You want auto sales in the double digits," he said.

Read the remainder of this article at the Waterloo Region Record website.