capacity is almost irrelevant in this industry. to increase sales, these firms need to hire, and possibly train, sales and support staff, programmers, developers and computer engineers. the data are limited, but evidence suggests firm creation in this industry is above the average of the rest of the economy. output has grown by more than 15 per cent since the start of 2011 — a faster pace than the rest of the service sector and more than double the pace of the goods sector. in the past five years, the industry has grown by close to $ 8 billion and now represents more than 3 per cent of our economy. this is the kind of creation that follows the destruction. these are just some of the channels of growth that we expect will replace what we have lost in the past few years. there will also be contributions from our more traditional exports. agricultural exports, for example, have grown by more than 13 per cent in the past five years, including $ 2. 4 billion in canola and pulse crops. pharmaceutical exports have grown by $ 7 billion ; machinery and equipment, $ 3 billion ; furniture, $ 2 billion. even the “ other ” export category is more than $ 1 billion higher than it was five years ago. when you put all of these examples together, you can see that we are making real progress in filling that hole i talked about earlier. this process has been gradual, more gradual than we would like, but based on the progress recorded to date, we have every confidence that the economy will find its way back to full output. as these new sources of growth add up, we will gradually absorb our excess capacity sometime around mid - 2018, and inflation will converge on our 2 per cent target from below. implications for policy - makers now, i ’ m not suggesting that this complex adjustment process is automatic, and that there ’ s no role for policy - makers to facilitate the adjustment — on the contrary. the conduct of monetary policy must manage uncertainty as a matter of routine — uncertainty about the economic outlook, about unobservable variables such as potential output, and so on. it is the nature of economics and economic models that we should always express our expectations in probabilistic terms — that is, a number surrounded by a margin of error — and make policy decisions that carefully weigh and manage those risks. in short, monetary policy is 4 / 6 bis central bankers'speeches not like engineering. it is the job of the central bank to understand and monitor these new growth

world has just seen are typically followed by growth that is much slower than in the wake of a normal recession. the legacy of a financial crisis is a heavy burden for any country, and paying down debt impedes normal economic growth for a long time. 2 this makes the task of disentangling the cyclical from the structural more difficult, but it needs to be done in order to determine the rate of non - inflationary this estimation of job losses is relative to trend. see “ global employment trends 2014 : the risk of a jobless recovery, ” international labour organization, geneva, 2014. this pattern has been well documented by harvard professors carmen reinhart and kenneth rogoff, among others. bis central bankers ’ speeches growth. as inflation targeters, the rate of potential output growth matters a lot to us. it is a critical input to the appropriate path for policy rates. lost potential from the crisis cyclical factors have clearly been playing a starring role in this underwhelming recovery. during the crisis, demand plummeted and so did output. as workers left the labour force and firms cancelled capital investments or went out of business, potential output growth declined as well. we are still facing headwinds from the deleveraging of households, fiscal consolidation and uncertainty. we estimate that potential output in canada is about 3 per cent below where it would have been without the recession. that ’ s roughly $ 3, 500 per household. in the united states, where the crisis hit harder, estimates of lost potential range from 5 per cent to 13 per cent – that ’ s us $ 6, 500 to us $ 18, 000 per household. demographics and labour supply we also have structural factors weighing on potential. the population is aging, there are risks that some working - age people who left the labour market may not return, and there are concerns that technology is not going to deliver the leaps in productivity that we have seen in the past. let ’ s start with demographic trends. globally, over the next two decades, the number of people aged 65 and over will rise by more than 80 per cent, from 600 million to 1. 1 billion. canada is no exception to this trend. the baby boomers are starting to retire, and so the proportion of the population that is of working age is shrinking. early retirement is also taking people out of the labour force. for canada, this has subtracted about 0. 45 percentage points from potential gdp growth over the last five years