Ontario hums again as the engine in Canada's industrial output.

All of a sudden, Ontario is booming. What's more, the boom may soon be felt across Canada. Ontario has long been Canada's economic engine. With some 50 percent of the nation's industrial production within its borders, both upswings and downswings in Ontario have a ripple effect elsewhere in Canada.

In the past 12 months, the province has been leading the rest of Canada in economic growth.

''The Ontario economy is outperforming the rest of Canada and even our own budget projections,'' Larry Grossman, provincial treasurer, crowed to journalists recently.

Jobs are becoming more plentiful throughout the province and unemployment is down dramatically. New business investment is up sharply. There are forecasts that Ontario's real growth could hit 5 percent this year.

Such forecasts are a new phenomenon for Ontarians, who haven't heard such upbeat language in years. For more than a decade, their province has been in the economic doldrums. It actually fell behind much of the rest of Canada in economic growth during the 1970s.

Moreover, the last three years have been a time of recession for all of Canada. With its big manufacturing plants, Ontario felt the recession more than many other parts of the nation. Now, recession is fading - and in Ontario, it's fading fast.

Although there are a few storm clouds on the economic horizon, the economic cheerleaders here expect Ontario's current economic upswing to continue through the present decade. They think the province will resume its place as the strongest link in the national economy.

The economists say Ontario's upswing is due to the overall decline in inflation in Canada and ''to a little help from our American friends,'' as the Toronto Sun put it.

Canada generally rides the coattails of the US economy. Any improvement in the US picture is typically reflected here. ''The strength of the US economy, along with its current recovery, is certainly helping us,'' said an economist with the Bank of Nova Scotia.

As the US auto industry swings into full production, for example, so does Canada's. In fact, most of Canada's automobiles are manufactured by the Canadian subsidiaries of the Big Three (General Motors, Ford, and Chrysler). Most of their facilities, like GM's sprawling plant at Oshawa, are in Ontario - and are expanding. In the past six months, close to $2 billion ($1.5 billion US) in new auto-sector investment has been announced by GM and American Motors, as well as by Honda, the Japanese maker.

This expansion will eventually bring a big boost to employment here. Already, in the past 18 months, some 175,000 new jobs have been created in Ontario. That accounts for half the national total of new jobs.

Throughout the recession era in the late 1970s and early '80s, unemployment was higher in Canada than in the United States. Canada's national unemployment tally is still double-digit, about 11.2 percent, but Ontario's rate continues to fall. It now stands at 9 percent.

Some economists in the provincial treasurer's office suggest it could fall even more before the year is over, perhaps dropping as low as 8.4 percent.

This upbeat view is not universally shared, however. Many in the private sector, coming out of the recession, are still concerned about the economy - and the future. Many companies are struggling to clean up balance sheets in the wake of the recession, and other companies need restructuring.

For instance, the construction, engineering, and finance industries are not part of the current boom. New plant construction will change this in the months ahead, but for the moment new construction lags.