Factories powering Canada’s economy

http://www.theglobeandmail.com/report-on-business/economy/growth/factories-powering-canadas-economy/article1964616/

Summary

The Canada's economy expanded by 0.5 per cent in January due to the increased in U.S. demand, and mostly the Canadian factories. Part of that was because of a rebound in auto and parts production tied to several temporary factros, which were plant shutdowns and harsh weather. The manufacturing and exporting sectros also contributed to the economic rebound. And the sectors' growth will continuely mostly rely on the U.S. demand. While export growth and business investments are expected to push up the Canada's economy, the strong loonie and the crisis in Japan can also do so, due to the higher commodity prices and production disruptions resulting from the crisis. However, economists believe the supply chain disruptions will short-lived and it will recouped later this year. One area that's likely to get a negative effect will be the Canada's auto industry because of the high gasoline prices. It would hurt the recovery in U.S. auto sales, which directly affect Canada's auto industry since the vast majority of production is still exported to the U.S.


Connection

The article states that the GDP will mostly depends on the demand of the U.S. market, and that is what Chapter 6 talks about. When the demand from the U.S. market increases as economy improves, Canada, which is one of the major importer to the U.S, will definitely benefit from it. And in the long run, it will push up the GDP of Canada. However, since it is still at the stage of recession, people might save more rather to spend more. And this might be hard to reach equilibrium GDP.



Reflection

As the economy recover from the recession, the demand of goods will definitly goes up, which also means the supply from manufactures will also goes up. The earthquake crisis that occured in Japan will bring opportunities to the province of British Columbia. There will be a high demand of wood for construction and rebuilding the city, and since British Columbia's major export is wood, it will definitely benefit the province. However, i think the auto industry is more likely to be contiously affect because of the increasing oil price. And the major reason for that to happen is the riots and revolutions happening in the Middle East and Afirca.