NEWS

Low loonie, low oil prices good for southwestern Ontario, expert says

08/06/2015 10:41 EDT | Updated 08/06/2016 05:59 EDT
The economy in southwestern Ontario could benefit if both the loonie and the price of oil stay low in the long term.

The dollar has been hovering around its lowest point in 11 years in recent days, with some experts suggesting it could still fall lower and stay low for months to come. Oil, meanwhile, was trading at its lowest point in months this week.

Mike Moffatt, an economist and assistant professor at Western University's Ivey Business School, said the combination of these factors could spur hiring opportunities if they persist.

"I think manufacturers will be hiring and that should knock down our unemployment rates a little bit," Moffatt told CBC Radio's Afternoon Drive in a telephone interview on Wednesday.

"So, you're never too sure how long the dollar will stay low for, but if this continues, this should be good for us."

This week, Statistics Canada reported that Canadian exports jumped by more than six per cent in June, a boost that Moffatt said looks promising and may point to the advantage that a falling dollar provides for this same sector.

"This is only one month of data, but it looks like we may have finally turned a corner and our exporters are now taking advantage of this lower dollar," he said.

And while that low loonie can be good for exporters, it's not great for everybody — like consumers who are buying groceries and other products imported from the United States.

"When you go to the supermarket and you're buying those tomatoes and strawberries and meat and what have you, a lot of those are American products and the prices of those are going to go up, thanks to the lower dollar," Moffatt said.

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