TD Bank economists have published a list of the top 10 economic trends they expect for 2002.

At the top of the list is the timing of the economic recovery. TD Economics suggests that a return to economic growth from the mild recession will most likely begin in the first quarter of 2002. “But it will be very weak at first, strengthening a little in the second quarter. The second half of the year should see much more robust economic growth at annualized rates of 3.5% or more.”

Because of the weak start, the annual economic growth numbers for 2002 will be anemic, TD says. It predicts 1.1% growth in Canada and only 1% in the United States. But with the stronger economic growth continuing through 2003, next year’s numbers will look much better, at just above 3% growth for both economies.

As for the equity market, TD says, the firming of North American equity markets since September 11 bodes well for this expected recovery. “It is useful to note, however, that the next few months will still present a rocky road for corporate profits and that there will be some dramatic differences in profits among various industrial sectors.”

Ranking third on the list of trends is profits and business investment. TD says that both of these suffered badly in 2001, but both should come back in 2002. “Neither profits nor business investment are expected to grow as rapidly as they did in 1999 and 2000, but their return to growth will be a key component in the economic recovery.”

Among the other trends noted are: the world economy, government spending and taxes, inflation, interest rates, the Canadian dollar, the labour market, and consumer spending and housing.