Canadian Economic Outlook for 2013: Cautious Optimism

The Bank of Canada announced this week that Canadian businesses are optimistic about 2013.  The economy is expected to grow modestly this year with most of the growth in the manufacturing sectors in Eastern and Central Canada.

http://business.financialpost.com/2013/01/14/canadian-businesses-see-brighter-future-bank-of-canada-reports/?__lsa=bc90-e162

Meanwhile, the Economic Club of Canada predicts that the U.S. will have a 'surge' in the economy for 2013 and this will benefit Canada.  Canada's economy will get a boost in exports, which supports the Bank of Canada's prediction of growth in the manufacturing sector.

This is good news for Canadian businesses, not only for those in the manufacturing sector but also for support services.  With an increase in demand, businesses will likely see modest growth over 2013.

However, one must wonder if the rosy predictions are merely temporary?  With governments continuing to run deficits, with debts piling up and with consumer debt at an all time high, one wonders how long we can continue before interest payments overwhelm us.  When growth is being financed by debt, there is a problem.  Whether or not Canada (and the West) can manage both growth and debt reduction remains to be seen.