Profs predict continued growth

19th Annual Business Forecast Lunch

2000-12-13 - According to a group of Queen’s School of Business professors, the Canadian economy will continue to soar in 2001, but it won’t soar as high as it did in 2000.

“At 3.3 per cent, the economy will experience a year of continued, but weaker, growth in 2001 relative to 2000,” said Dr Merv Daub, a professor whose research interests lie in economic forecasts. “This is above the average annual growth rate for the last fifteen years but below the 4.4% growth the Canadian economy has averaged over the past two years.”

Daub made this prediction at the School’s nineteenth annual Business Forecast luncheon, held December 13 in Kingston. Along with finance professor Bill Cannon, international business professor Don Macnamara and marketing strategy and consumer behavior specialist Ken Wong, Daub predicted falling prices and interest rates in face of weaker economic growth in 2001. The group also predicted weaker labor markets and rising unemployment. Finally, the group predicted that the Canadian dollar would rise modestly in 2001 over what it was during 2000.

The group reflected on the predictions they made for 2000.

“The growth in the Canadian economy was much higher than our group predicted,” said Daub. “Like many other forecasters, we underestimated the continued strength of the U.S. economy and the extent to which the Canadian economy would catch fire.”

The group’s average forecast for 2000, based on the change in the gross domestic product, was 2.9% versus the actual increase of 4.8%. However, forecasts for the consumer price index, unemployment rate, prime interest rate and the exchange rate were close to their actual average yearly levels.