A "heavy drag" from the trade sector will push Ontario to the brink of a recession this year, according to a new Royal Bank forecast.
  
The bank predicts Ontario will record growth below one per cent in 2008, followed by a modest improvement of 1.9 per cent in 2009.
  
It says Ontario will be disproportionately affected by a nationwide hit to exports, largely due to a heavy reliance on U.S. demand for its products, notably in the automotive and forestry sector.
  
RBC chief economist Craig Wright also says Ontario's labour markets are showing signs of a slowdown and may not be as resilient as thought.
  
He notes the public sector is supporting the job market, while the private sector continues to cut back in key sectors such as forestry, agriculture, manufacturing, finance, insurance and real estate.
  
Despite the gloomy forecast, RBC says any slowdown should be short-lived due to such positives as a healthy real estate market and rising wages.