Download Ontario regional economic outlooks 2016-2017

Economic Analysis of Ontario
Volume 6 • Issue 5 • December 2015 | ISSN: 0834-3980
Ontario Regional Economic Outlooks 2016 -2017
Highlights
•
Improving regional growth prospects
•
Lower regional unemployment rates
•
More active regional housing markets
•
Regional growth differentials will narrow
•
Northern regions will lag due to poor mining
prospects
Table of Contents
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Ontario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Ottawa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Kingston-Pembroke . . . . . . . . . . . . . . . . . . . . . . . . 6
Muskoka-Kawarthas. . . . . . . . . . . . . . . . . . . . . . . . 8
Toronto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Summary
Kitchener-Waterloo-Barrie . . . . . . . . . . . . . . . . . 13
Hamilton-Niagara Peninsula . . . . . . . . . . . . . . . .15
Ontario’s economic performance is not shared
equally in all regions in the province due to
differences in their economic makeup or base.
External macro factors play an important role
not only in Ontario’s economic performance but
also in each region in varying degrees. Economic
prospects for Ontario are improving aided by
positive externals such as a low dollar, faster U.S.
growth, and low interest rates.
London . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Regional growth performances during 2015
were led by the Toronto and Hamilton-Niagara
regions, with the Kitchener-Waterloo-Barrie
and London regions close behind. At the other
end of the growth spectrum were the northern
regions and to a lesser extent Windsor-Sarnia
and Stratford-Bruce. A narrowing of growth
differentials amongst regions was evident,
though small, and made more apparent by the
large discrepancy that materialized following the
2008-09 recession.
All regions will see more housing activity, in
varying degrees, depending on local economic
and market conditions. Some previously slower
regional markets such as London and WindsorSarnia are poised to have substantial gains.
Toronto and Hamilton-Niagara markets will
generate the largest price increases.
Further convergence in regional growth performances is expected during the next two years
with some of the laggards closing the gap rather
than the leaders surging further ahead. Exceptions are the northern regions, which are heavily
dependent on mining and resources but face a
weak outlook for metal markets, where growth
will remain low and possibly negative.
Windsor-Sarnia . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Stratford-Bruce Peninsula . . . . . . . . . . . . . . . . . .22
Northeast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Northwest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Projected population growth in 2016 and 2017
gradually edges higher in most regions, except
in the north. Low growth will continue to prevail
in the Kingston-Pembroke, Stratford-Bruce, and
Windsor-Sarnia regions. A notable pickup is
forecast for the Muskoka-Kawarthas region.
Report framework
The regional areas in this report follow Statistics
Canada’s 11 Economic Region boundaries for Ontario. The main metropolitan area in each region is
covered. The principal economic indicators used to
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track regional economic performance are employment, unemployment, housing sales, housing prices,
residential and non-residential building permits, and
population. Other data sets, such as housing starts
and non-residential building construction investment
spending, are referred to in the text, but no data is
presented in tables. Gross Domestic Product (GDP)
data are not available by region.
The labour market is a key indicator of regional performance and Statistics Canada’s Labour Force Survey
(LFS) is the main source of this information. Regional
LFS data has issues with sample errors making it difficult to separate underlying movements from sample
noise, which is more problematic in smaller regions.
Employment Insurance (EI) data is helpful to verify
labour market changes, but it too has limitations.
Recent performance varied
The province’s variable, but overall, moderate growth
performance so far in 2015 has been mirrored in
most regions. Provincial real GDP growth in the first
quarter was minimal followed by a modest rebound
the second quarter and very likely a stronger performance in the third quarter. Fourth quarter real GDP
growth will probably ease.
Ontario’s employment profile generally tracked
real GDP with a dip in the first quarter of 2015 and
faster growth thereafter. Regionally, employment
turned up during 2015 in Toronto, Hamilton-Niagara,
and London, but declined in the Ottawa, KingstonPembroke, Muskoka-Kawarthas, Windsor-Sarnia,
Stratford-Bruce, Northeast, and Northwest regions
and as a result they will have lower employment for
the year than in 2014. Kitchener-Waterloo-Barrie
region employment was little changed.
In more than one instance, the 2015 LFS results were
at odds with EI data, or with recent trends, and were
interpreted as sample variability rather than a fundamental change in the labour market. The regions
in question were Kingston-Pembroke, MuskokaKawarthas and Stratford-Bruce for doubtful downside
shifts and London’s sharp increase was a questionable
upside move.
Unemployment rates in most regions will close out
the year lower than in 2014. The exceptions are the
Muskoka-Kawarthas, Windsor-Sarnia, Stratford-Bruce
and the Northeast. EI data did not corroborate the
unemployment rate jump in the Muskoka-Kawarthas
and Stratford-Bruce regions, leaving LFS sample variability as the likely cause.
Economic Analysis of Ontario
Real GDP and Employment Growth,
Ontario
Per cent change
4
2
0
-2
Real GDP
-4
2001
2003
2005
2007
Employment
2009
2011
2013
2015
2017
Source: Statistics Canada, Central 1 Credit Union. Forecast 2015 to 2017
While there was some divergence in regional labour
market performance in 2015, this was not the
situation in the housing market. All regional housing
markets expanded with more sales, higher prices,
and more new construction. The degree of market
expansion varied with larger gains in the central and
southwest regions and smaller gains in the eastern
and northern regions.
Non-residential construction was less robust than
residential construction in most regions. The Toronto
region will post a 17 per cent rise in 2015 mainly due
to a 53 per cent jump in public permits, with private
permits, industrial and commercial buildings up eight
per cent. The London and Northwest regions will
also have double-digit gains this year, led by public
permits as well. Regions with less activity this year,
such as Ottawa and Kingston-Pembroke, are coming
off a public permit surge in 2014.
The latest regional population data is as of July 1,
2014. Statistics Canada’s 2015 estimates will be
released in 2016. At the provincial level, population
growth slowed in the year ending June 30, 2015 to
less than one per cent on fewer immigrants and net
non-permanent residents. Net interprovincial migration remained negative, though the outflow slowed.
Improving outlook
The performance of Ontario’s regional economies
depends on external and domestic factors as well as
on a region’s industry and demographic composition.
Several regions in Ontario are quite dependent on
external export-driven factors. The northern regions
with their considerable dependence on forestry,
mining and metal products are at one end of this
spectrum, while Ottawa and the Muskoka-Kawarthas
regions are more domestically driven and less exposed to export markets.
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The external environment for Ontario will turn more
positive during the next two years due to a better
performance in its largest export market, the U.S.,
a low Canadian dollar, low interest rates, and low
oil prices. Working against these positives will be
low metal prices, geopolitical events, and potential
disruptions in financial markets emanating from
emerging markets. Global economic growth will
remain modest and below potential, mainly due to
the slowdown in China.
Exports play a key role in Ontario’s economic performance and while international goods and services
exports have better prospects ahead, interprovincial
exports will be constrained by the negative fallout
from the poor oil and natural gas markets that is
affecting energy producing provinces such as Alberta.
On the domestic front, government fiscal policy
will be more stimulative with time as the impact of
more infrastructure spending will be felt to a greater
degree. Private investment spending is set to build
momentum, while residential investment spending
will remain at a robust pace with some slowing into
2017.
Personal income will benefit from faster growth in
employment and hours worked and a lower unemployment rate, which will contribute to higher wages
and salaries growth. Corporate profits are forecast
to turn positive in 2016, following an expected small
negative result in 2015.
Ontario’s real GDP growth is forecast at 2.6 per
cent in 2016 and 3.0 per cent in 2017, following an
estimated 2.3 per cent expansion in 2015. Statistics
Canada’s preliminary 2014 estimate is 2.7 per cent.
Ontario’s economy has upshifted from its slow
growth phase of 2012 and 2013 to moderate growth
and, if the forecast proves accurate, will shift to a
more robust phase in 2017.
Economic performance across Ontario’s regions
during the next two years will continue on recent
trends, resulting in a greater divergence between
some regions. The northern regions will post slight
growth, while the central and southwestern regional
economies will be the province’s main growth drivers.
In the absence of GDP data for the regions, employment is the best single available economic indicator
of a region’s overall performance.
Growth in most regions will increase over 2014
and continue their cyclical expansion from the last
recession. The Toronto and Hamilton-Niagara regions
Economic Analysis of Ontario
also are expected to perform above the provincial
growth rate, while the Kitchener-Waterloo-Barrie and
Ottawa regions look to perform similar to Ontario’s
pace, which is estimated at 1.5 per cent in 2016 and
1.4 per cent in 2017.
The London region, which was hard hit by the recession and restructuring of its manufacturing base, will
continue to regain lost economic output and post
growth above the provincial average in 2016 and
2017. In the last year of the forecast, employment
will be above the 2007 pre-recession high.
Another manufacturing region hard hit by the recession was Windsor-Sarnia and employment has slowly
advanced from its recession low. Forecast employment growth will be close to but below the provincial
average and in 2017 employment will be at its
highest level since the recession, but still well below
the pre-recession high.
The three remaining regions – Kingston-Pembroke,
Muskoka-Kawarthas, and Stratford-Bruce – are
expected to grow in line with the recent modest
trend growth. For example, 2017 employment in
these regions is forecast at levels comparable to
or slightly higher than those that existed five years
ago. In contrast, employment in Toronto, KitchenerWaterloo-Barrie, and Hamilton-Niagara will be six to
nine per cent higher, with Toronto leading this group.
All but one region is expected to see lower unemployment rates in 2016 and 2017 compared to this year.
The exception is Kingston-Pembroke but this is due
more to LFS sample issues than to underlying performance. Ontario’s unemployment rate at 6.6 per
cent and 6.3 per cent in 2016 and 2017, respectively,
would be the lowest since the recession. The lowest
regional unemployment rate will be in Kitchener-Waterloo-Barrie, followed by London and Windsor-Sarnia.
The Stratford-Bruce and Northwest regions will also
have low unemployment rates due to low population
growth and lack of employment opportunities. The
highest unemployment rate will prevail in WindsorSarnia at 8.0 per cent in 2017.
Regional housing markets will continue on their
expansion phase during the next two years. The low
interest rate environment is a strong stimulus to all
regional housing markets. No recession in Ontario’s
housing market is foreseen until the next global
economic recession and regional markets will expand
reflecting their own local economic circumstances.
Housing markets in stronger economies and with
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higher population growth outperform those with
weaker demand conditions.
MLS® residential sales growth is predicted to be
most robust and above the provincial averages during
the next two years in the Windsor-Sarnia and London
regions. These two regions will post the fastest sales
growth in 2015 and this momentum carries into the
forecast, which is supported by improved economic
performance and the release of pent-up demand
following the lean post-recession years.
Another more active regional market is MuskokaKawarthas. Residential sales are predicted well
above provincial sales growth rate at 6.4 per cent in
2016 and 4.6 per cent in 2017. In this region, labour
market performance is less of a housing driver than
the influx of retiree migrants from other parts of the
province, notably Toronto, in addition to low interest
rates. Robust market conditions in Toronto and other
regions facilitate and encourage migration.
Less active markets look to be in the northern regions
and in Stratford-Bruce, while the remaining regions
will perform around the provincial sales pace. The
Toronto and Hamilton-Niagara markets have outperformed in recent years and are seen expanding at a
slower but still substantial pace.
As for price performance, Toronto and Hamilton-Niagara will still lead all regions and outpace provincial
increases. The MLS® residential average sale price
will climb in every region during the next two years
with the slowest increases in those regions with the
lowest sales gains.
Residential construction, as captured by building
permits, tracks housing market conditions and most
regions will see higher levels during the next two
years. Residential construction can be a significant
local economic driver.
Non-residential building permits will rise in this
forecast with 2017 considerably more active than
2016. Private non-residential building permits will
outperform public permits mainly because of higher
2015 levels and the ‘lumpy’ nature of large building
projects. Investment on commercial and industrial
buildings has been below trend since the recession
and the predicted pickup in non-residential private
permits will be in response to improved market conditions. Public permits are expected to receive a boost
in 2017 when increased government infrastructure
spending translates into project development.
Economic Analysis of Ontario
Ontario’s population growth will edge higher due to
more immigration and a lower net outflow to other
provinces during the next two years. Toronto will
continue as the main destination for immigrants and
will lead the regional growth rankings. Near-zero
growth rates will extend in the two northern regions,
Kingston-Pembroke, Windsor-Sarnia, and StratfordBruce.
There are substantial differences in economic performance within some regions. The main metropolitan
area in the region, which is the service, distribution,
and administrative centre, can have a different
economic structure than in the rest of the region.
This is evident in several regions, notably in the
Kingston-Pembroke region wherein the economy of
the Kingston Census Metropolitan Area (CMA) bears
little resemblance to the economic base in the rest of
the region. Other examples are the Ottawa, Peterborough, and Thunder Bay CMAs, which are distinct
from the rest of their regions.
The regional forecasts that follow contain information
and forecasts for the main metropolitan area in each
region.
Ottawa Economic Region
The Ottawa Economic Region spans Leeds and Grenville, Lanark, Prescott and Russell, Dundas and Glengarry counties and is anchored by the Ottawa Census
Metropolitan Area (CMA). The region represents
about 10 per cent of Ontario’s population with about
1.31 million people. While there is some diversity in
the economic base, growth trends typically reflect
the performance of government services and the Ottawa CMA, which accounts for three-quarters of the
population base. Outside Ottawa manufacturing and
agriculture are underlying drivers of the economy.
As anticipated, growth in the Ottawa economic
region remains subdued. Fiscal restraint on the part
of the federal government is the key drag on the
economy and has offset an increasingly active technology scene. Meanwhile, challenges have mounted
in agriculture and food-processing sectors.
A low growth profile has cut employment this year,
despite a brief uplift during the federal election.
Average Labour Force Survey (LFS) employment for
the economic region is forecast to decline by 1.3 per
cent, paring most of last year’s gain.
Most of the loss reflects public-sector restraint in the
capital region. Direct government services employ-
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ment plunged through the first three quarters by
eight per cent, dragging sector employment to the
lowest since 2007/08. Losses have also been recorded in professional, science and technical services,
which could reflect similar factors impacting crown
corporations, as well as at private companies that
service government.
While the footprint is small, agriculture employment
declined significantly, likely reflecting layoffs from the
closure of Continental Mushrooms near Metcalfe, and
other challenges in the sector.
Construction has been a bright spot following an
uplift in building permits in 2014, which has driven
employment growth as work on the $2.1 billion
Confederation (LRT) line, Rideau Centre and the Bank
of Canada provided some support.
Labour markets have proven weaker outside the
Capital region, with stronger job losses and higher
unemployment rates. While, LFS data is unavailable for all sub-regions, Employment Insurance (EI)
counts point to labour market challenges since the
fourth quarter of 2014, particularly in the Cornwallanchored Stormont, Dundas and Glengarry area,
which experienced a year-over-year increase of 20 per
cent in EI beneficiaries.
Cornwall has faced a series of setbacks over the past
year stemming from struggles in the manufacturing
sector. Companies that have shuttered or announced
closure of local operations included Sensient Flavors,
American Standard, and Philips Canlyte, costing the
region hundreds of jobs. Meanwhile, the recent
merger of Kraft and Heinz has reportedly led to
further job losses at the local operation.
The regional growth slowdown is likely at an end and
improved conditions are expected in both 2016 and
2017. Electoral success by the federal Liberals bodes
well for federal government workers, given increased
spending measures and deficit spending outlined
in their electoral plan. One caveat is that a weaker
than previously projected government revenue due
to a sluggish economy could prove a headwind to
government spending.1 This will depend on how new
government spending plans will react to a weaker
revenue base and how much the government is
willing to shift into deficit. Nonetheless, growth in
public-sector activity is expected to lift the broader
economy through multiple channels, including
demand for professional services and retail spending,
housing and drive increased business and publicsector investment.
1
Department of Finance Canada, Update of
Economic and Fiscal Projections 2015. November 20,
2015. http://www.budget.gc.ca/efp-peb/2015/pub/efp-peb15-en.pdf
Ottawa Economic Region Forecast
2012
Employment (% ch.)
2.3
2013
-1.5
2014
2015
2016
2017
1.9
-1.3
1.1
1.7
5.9
Unemployment Rate
6.4
6.5
6.6
6.5
6.3
MLS® Res. Sales (% ch.)
0.2
-3.8
-0.4
8.7
3.4
5.4
MLS® Res. Avg. Price (% ch.)
2.4
2.0
1.6
1.8
2.6
2.8
Residential Permits (Units) (% ch.)
Non-Residential Permits ($ vol) (% ch.)
Population (% ch.)
2.7
-19.1
26.3
-32.1
10.5
7.9
24.5
-8.2
0.1
-9.0
-3.8
6.7
1.0
0.9
0.9
0.8
0.9
1.1
Ottawa CMA Forecast
2012
2013
2014
2015
2016
2017
Employment (% ch.)
3.5
-2.2
2.0
-0.7
0.9
1.9
Unemployment Rate
6.2
6.3
6.5
6.4
6.1
6.0
MLS® Res. Sales (% ch.)
-0.4
-3.1
0.3
5.7
4.7
5.8
MLS® Res. Avg. Price (% ch.)
2.3
1.8
1.2
1.7
2.8
2.9
Residential Permits (Units) (% ch.)
2.2
-17.5
33.2
-36.8
13.0
7.7
34.8
-7.0
-3.0
-2.6
3.3
5.3
1.6
1.3
1.2
1.1
1.2
1.2
Non-Residential Permits ($ vol) (% ch.)
Population (% ch.)
Sources: Statistics Canada, CREA, C1CU. Actuals 2012 to 2014.
Notes: Housing sales and prices represent combined activity in real estate boards within the region.
Ottawa CMA approximated with data from the Ottawa Real Estate Board
Economic Analysis of Ontario
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Meanwhile, a low Canadian dollar will help short-term
competitiveness of firms in the region. Beneficiaries
include high-tech manufacturing and the growing
software and mobile app sector, which will be further
bolstered by improving U.S. demand and capital renewal not to mention recent grants from the Ontario
government to Cisco ($220 million) and Open Text
($120 million) will likely drive further employment
gains over the coming decade.
The regional manufacturing base is anticipated to
stabilize with favourable export conditions from the
low Canadian dollar and improved U.S. economy.
However, underlying structural shifts are occurring,
with consolidation an industry trend that will persist.
A re-emergence of manufacturing growth is not
expected, but the region is adapting.
Outside Ottawa, the economy continues to develop
as a key player as a retail distribution hub and
driving warehousing jobs. Key entrants over the past
year include Walmart, which took over the Target
distribution centre in Cornwall and added a net 300
jobs to regional operations. Giant Tiger recently
announced plans to open a new distribution centre
in Edwardsburgh-Cardinal Township that will employ
300 and Hercules SLR a producer of safety equipment
is also adding to the list of distribution centres in
the region. There is also the possibility of a Loblaw’s
centre to be constructed, although this is yet to be
confirmed. Call-centres are also a growth industry for
Cornwall. Atelka recently announced an expansion
that will drive 200 new jobs, while Scotiabank also
plans to modestly expand its footprint.
Improved regional growth prospects will support
employment growth and housing activity in 2016 and
lift population growth thereafter. Regional employment will climb 1.1 per cent in the coming year.
Employment growth outside the Ottawa CMA will
bounce back after a 2015 downturn, with the Ottawa
CMA growing 0.9 per cent. Gains will continue in
2017 with a solid growth rate of 1.7 per cent, lowering unemployment to 6.2 per cent in the region.
Population growth holds steady near 1.0 per cent
over the forecast period, with stronger gains in
the Ottawa CMA. Improved prospects for federal
hiring are likely to induce higher international and
interprovincial migration inflows to the region after
disappointing trend since 2011.
Strengthening housing market trends seen this year
are anticipated to persist into next year. While low interest rates are unlikely to fuel another surge in sales
Economic Analysis of Ontario
Total Employment Excluding Public and
Public Employment, Ottawa Region
Persons - thousands
600
Persons - thousands
Total ex. Public (L)
135
Public Adminstration
130
580
125
560
120
540
115
110
520
500
105
2005
2007
2009
2011
2013
2015
100
Source: Statistics Canada, Central 1 Credit Union. Latest: Year to October 2015
as seen in 2015, economic trends should support a
moderate sales pace. Annual sales are forecast to
grow at a moderate pace with faster gains in the Ottawa CMA. Higher demand has led to a rebalancing
of market conditions this past year, and is expected to
underpin price growth of around 2.5 to 3.0 per cent.
While still mild, this will mark a positive break from
the flat to down-pattern observed since 2013.
Kingston-Pembroke Economic Region
A mixed economic performance has played out
in 2015 with varied outcomes across sectors and
locations within the Kingston-Pembroke Economic
Region. The Kingston-Pembroke Economic Region
defined by Statistics Canada includes the Kingston
metropolitan area and the Frontenac townships, the
counties of Lennox and Addington, Hastings, Renfrew,
and Prince Edward. Economic growth is more robust
in the Kingston metropolitan area than in the more
rural outlying areas.
The labour market is a key economic sector and
indicator which did not perform well in 2015, according to Statistics Canada. The headline employment
figure declined more than three per cent compared
to 2014, however, the unemployment rate dropped
to nearly seven per cent from above eight per cent in
2014. This apparent anomaly is explained by a larger
drop in the labour force participation rate.
A stark difference exists between the labour market
in the Kingston metro area and the rest of the
Kingston-Pembroke region. Employment in Kingston
is up more than two per cent this year and its unemployment rate is below seven per cent, while in the
rest of the region employment declined about eight
per cent. The details reveal a near 10 per cent drop
in the labour force outside of Kingston, which could
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be an outlier survey result. Large swings in Statistics
Canada’s regional labour force estimates are common
and the 2015 result should be taken in that light. It is
too early to determine if 2015 saw a new downtrend
shift, but based on past experience it is likely that the
Statistics Canada survey will record a labour force and
employment rebound in 2016.
Employment Insurance (EI) beneficiary counts provide
another view of the labour market. In particular,
they show a near 10 per cent increase in persons
receiving regular benefits in Renfrew County in 2015
and a roughly five per cent increase in Prince Edward
County. In contrast, Lennox and Addington County
EI counts are down about 10 per cent. The remaining counties in the economic region, Frontenac and
Hastings, are seeing little change from last year.
Housing has been a source of economic growth in
2015 with more sales and new construction and
higher prices. MLS® residential sales in the economic
region are up 10 per cent so far in 2015, led by a 20
per cent gain in the Bancroft and Area Association
and near 20 per cent in the Quinte & District Association. Sales in the Kingston and Area Association are
running about six per cent ahead of last year, while
Renfrew County Board sales are even with last year.
average sale price above 15 per cent. Price pressure
is much less intense in other areas with prices up
about five per cent in Quinte & District and around
four per cent in Kingston. Renfrew Board prices are
little changed from last year.
New construction has rebounded in 2015 with a near
15 per cent jump in residential building permit units.
Available geographic details within the economic
region are limited to the Kingston metro area, which
is showing the same percentage gain as the region.
Non-residential construction dropped almost 50
per cent in 2015 following the 2014 spike in public
permits due to the Mental Health Services Building in
Kingston. A drop off in 2015 was expected. Private
non-residential permits issued continue to track at
recent trend levels reflecting market conditions from
commercial and industrial buildings.
Non-residential building construction investment
spending for the Kingston metro area is up about
20 per cent so far this year due to the new medical
facility. Private sector investment is up about five per
cent but the quarterly trend is sliding lower. Completion of the medical facility will bring down spending
in 2016.
The latest available population estimates remain as of
July 1, 2014 with no updates from Statistics Canada
Housing prices track sales. The large sales gain in
Bancroft is accompanied by a substantial rise in the
Kingston-Pembroke Economic Region Forecast
2012
2013
2014
2015
2016
2017
Employment (% ch.)
-1.8
0.1
-1.8
-3.4
2.0
1.9
Unemployment Rate
7.2
7.1
8.4
6.9
7.2
7.5
MLS® Res. Sales (% ch.)
3.0
-5.4
-2.4
8.5
6.5
3.7
MLS® Res. Avg. Price (% ch.)
2.5
2.8
0.3
4.9
5.8
3.6
Residential Permits (Units) (% ch.)
-6.7
6.3
-9.8
13.5
9.5
8.7
-10.6
-20.5
108.3
-45.5
3.7
7.1
0.3
0.2
0.2
0.3
0.3
0.4
Non-Residential Permits ($ vol) (% ch.)
Population (% ch.)
Kingston CMA Forecast
2012
Employment (% ch.)
1.6
2013
2.5
2014
2015
2016
2017
-1.5
2.0
1.8
2.4
Unemployment Rate
6.7
6.3
6.8
6.9
6.5
6.2
MLS® Res. Sales (% ch.)
4.5
-4.7
-5.8
5.6
4.8
6.1
MLS® Res. Avg. Price (% ch.)
3.2
3.4
0.9
4.6
6.8
4.8
Residential Permits (Units) (% ch.)
-5.5
12.7
-21.2
13.3
11.8
5.3
Non-Residential Permits ($ vol) (% ch.)
-7.6
-22.0
268.3
-76.0
66.7
-16.7
Population (% ch.)
0.9
0.7
0.5
0.4
0.4
0.5
Sources: Statistics Canada, CREA, C1CU. Actuals 2012 to 2014.
Notes: Housing sales and prices represent combined activity in real estate boards within the region.
Kingston CMA approximated with data from the Kingston and Area Real Estate Board
Economic Analysis of Ontario
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Central 1 Credit Union
as of this writing. To recap, population growth
slowed to around 0.5 per cent in Kingston metro
and to no growth at the economic region level.
Consequently, population declined in areas outside
Kingston. It is likely that little or no change in these
trends played out in the year ending July 1, 2015.
Kingston’s service-based metropolitan area economy
with a concentration in education, health, government, and tourism industries will continue to outperform the rest of the economic region. Employment,
investment, and population growth in Kingston will
outpace other areas.
The labour market will build on recent gains with
employment growth around two per cent annually
during 2016 and 2017 with a declining unemployment rate. The housing sector is on track to post
further gains in sales, prices, and new construction.
The industry makeup in the rest of the economic
region is less favourable for growth than in Kingston
though there are considerable differences among
those areas. Pembroke is more oriented to resource
extraction and processing than other centres in
the region, while Quinte West and Belleville have a
relatively larger manufacturing sector and well as in
transportation-warehousing industries. Petawawa’s
economy is dominated by the Canadian Forces’ Garrison Petawawa.
Employment in the region, excluding Kingston, has
trended lower about one per cent per year since
the 2008-09 recession. The large labour force and
employment decline in 2015 pulled the trend down
further but it is not certain whether it is a sample
outlier or actual trend downshift. There were no
significant negative employment announcements
in 2015, according to a news scan. This forecast
assumes a reversal in the 2016 sample result and a
return to trend performance.
Housing market activity in centres outside Kingston
will post further gains in 2016 and 2017. Non-residential investment, though, looks to remain around
current market levels unless a project-specific development occurs. Non-residential building investment
will receive a boost when the 80,000 square foot
medical campus by The Clermont Group proceeds.
The external economic backdrop will continue to
support growth through the lower Canadian dollar
and higher U.S. economic growth. Ongoing low oil
prices are a positive for consumers and businesses as
are low interest rates. Improved growth in Ontario’s
Economic Analysis of Ontario
Employment, Kingston CMA and Rest of
Kingston-Pembroke Region
Persons - thousands
Persons - thousands
150
85
140
80
130
75
120
Kingston CMA (L)
70
2005
2007
2009
Rest of Region
2011
2013
2015
110
Source: Statistics Canada, Central 1 Credit Union. Latest: Year to October 2015
economy will also contribute to the region’s growth
in 2016 and 2017.
Muskoka-Kawarthas Economic Region
The Muskoka-Kawarthas Economic Region is anchored
by the Peterborough Census Metropolitan Area (CMA)
and contains the census agglomerations of Kawartha
Lakes, Port Hope, and Cobourg. The economic region
spans the Northumberland, Peterborough, Kawartha
Lakes, Muskoka, and Haliburton counties. The
region’s industry makeup varies with Peterborough
CMA having a higher concentration in education and
health industries than the rest of the region, which
has a higher concentration in accommodation and
food, trade, and construction industries. Business
services and support industries also register with a
significant concentration.
One of the main economic indicators available at the
regional and local level is from Statistics Canada’s
Labour Force Survey (LFS), which produces employment and unemployment rate information. In 2014,
the LFS results showed a 10.6 jump in employment
and a large drop in the unemployment rate to 6.3 per
cent. So far in 2015, employment is down 9.5 per
cent and the unemployment rate is up to 7.8 per cent
– a complete reversal. The region’s labour market
returned to trends and levels that existed prior to
2014.
Sample variability in the LFS at the regional and local
level can be considerable and recent results for the
Muskoka-Kawarthas region is one of the more dramatic examples. Large swings labour market data are
evident in other regions as well at various times.
Another indicator of the regional and local labour
markets is Employment Insurance (EI) data. Examina-
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Central 1 Credit Union
tion of EI data reveals no sharp decrease in 2014 or
sharp increase in 2015 EI counts in any of the five
counties in the region. This supports the view the
LFS results for 2014 and 2015 were outliers and there
was no material change in underlying labour market
trends.
Housing starts in the Peterborough CMA are up 68
per cent so far this year due to a surge in apartment
building permits issued in late 2104. The decline
in residential building permits this year reflects this
timing and does not indicate deterioration in market
conditions or investor confidence.
The higher than usual variability in the LFS results
in the past two years makes analyzing employment
changes by industry more difficult and uncertain. It
is probably safe to begin with the premise that prior
trends extended through 2014 and 2015.
Non-residential building permits are also lower this
year due to a large industrial permit issued in 2014.
However, this construction activity extends through
2015. Non-residential building construction investment spending in the Peterborough CMA is running
ahead of last tear.
One area that saw a substantial increase was the
housing market. MLS® residential sales in the region
were up 17 per cent this year to October compared
to the same period last year. Sales in the Peterborough and Kawarthas real estate board area were up
20 per cent and close behind were the Kawartha
Lakes and Muskoka-Haliburton areas.
This 2015 sales pickup, which has occurred in the
context of declining new listings, has been pushing
up prices at a faster pace. Market conditions are
the tightest in the region since the last recession,
particularly in the Peterborough, Kawartha Lakes, and
Cobourg-Port Hope areas. Prices have risen more
than five per cent in the region and in all areas except
Muskoka-Haliburton.
External factors affecting the region’s 2016 and 2017
outlook are favourable for growth to continue and
increase. Improved growth in Ontario, low interest
rates, a low Canadian dollar, and faster U.S. growth
will lift the region’s domestic and export sectors, such
as tourism and manufacturing.
Employment growth is forecast to return to trend
performance in 2016 following last year’s decline,
with a gain of 3.2 per cent in 2016 and 1.1 per cent in
2017. The larger percentage rise in 2016 is off a low
2015 base, while the employment level is on recent
trend. The unemployment rate will remain roughly
the same at just under eight per cent in 2016 before
declining to 7.4 per cent in 2017.
Muskoka-Kawarthas Economic Region Forecast
2012
2013
2014
2015
2016
2017
Employment (% ch.)
-2.6
-1.5
10.6
-9.5
3.2
1.1
Unemployment Rate
7.7
7.9
6.3
7.8
7.9
7.4
MLS® Res. Sales (% ch.)
2.5
0.1
5.5
16.3
9.1
6.7
MLS® Res. Avg. Price (% ch.)
2.1
3.3
6.2
5.0
6.8
4.2
Residential Permits (Units) (% ch.)
8.0
4.7
21.4
-16.2
8.1
12.5
23.3
-24.0
81.6
-44.7
15.4
20.0
0.6
0.5
0.4
0.4
0.7
0.8
Non-Residential Permits ($ vol) (% ch.)
Population (% ch.)
Peterborough CMA Forecast
2012
Employment (% ch.)
1.6
Unemployment Rate
MLS® Res. Sales (% ch.)
MLS® Res. Avg. Price (% ch.)
Residential Permits (Units) (% ch.)
Non-Residential Permits ($ vol) (% ch.)
Population (% ch.)
2013
2014
-6.2
10.2
8.5
9.6
8.2
1.8
-0.5
1.5
4.1
2.3
3.5
2015
2016
0.8
2017
1.8
1.3
8.1
7.8
7.6
16.4
8.3
7.7
5.1
6.8
3.2
8.6
36.8
12.5
-19.2
20.0
12.5
34.6
-52.6
143.1
-37.3
16.7
28.6
0.4
0.3
0.2
0.4
0.8
1.0
Sources: Statistics Canada, CREA, C1CU. Actuals 2012 to 2014.
Notes: Housing sales and prices represent combined activity in real estate boards within the region.
Peterborough CMA approximated with data from the Peterborough and the Kawarthas Association of REALTORS®
Economic Analysis of Ontario
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Central 1 Credit Union
Population growth, which is primarily due to net positive flows of people from other parts of the province,
is forecast to rise to 0.7 per cent in 2016 from an
estimated 0.4 per cent in 2015. Rising home prices
in the GTA and an aging demographic will result in an
increasing influx of people from the GTA and other
parts of Ontario. This will stimulate the housing
market and the domestic economy.
MLS residential sales in the Muskoka-Kawarthas
region are forecast at 9,000 units in 2016, up nine
per cent from 2015 and setting another record high.
The current housing cycle is seen extending through
2017 and setting new highs in the process. The average sale price in the region will increase between five
to seven per cent annually with more upside potential
if supply does not respond more vigorously.
®
Residential construction as measured by building permits will follow housing sales and prices higher, while
non-residential construction will lag and remain at
levels similar to previous years. A significant increase
in private investment in commercial and industrial
buildings usually occurs when more excess capacity
is absorbed, which is associated further economic
growth.
Public investment spending will likely increase during
the next two years due to the new federal government’s infrastructure initiatives. A recent and unrelated project announcement was for a $24 million
sewer project in Peterborough.
A moderate but improving growth environment is
foreseen for the region and the Peterborough CMA
in 2016 and 2017. The region’s shift to serviceproducing industries will continue as in other regions
in Ontario and a growing portion of service industries
will become export-oriented.
Toronto Economic Region
Key indicators suggest economic performance in the
Toronto Economic Region (ER) has been relatively
robust in 2015. Headline labour market indicators
have recorded above average employment growth
and lower unemployment. Housing market indicators
are robust with above average growth in sales, prices
and construction. Non-residential building permits
and construction have increased materially for the
first time in four years.
Population growth has slowed slightly as net in-migration has declined due to less international migration
though interprovincial migration has improved.
Economic Analysis of Ontario
MLS Residential Sales,
Muskoka-Kawarthas Region
Units
8,500
8,000
7,500
7,000
6,500
6,000
5,500
2005
2007
2009
2011
2013
2015
Source: CREA, Central 1 Credit Union. Note: 2015 estimated.
Labour force growth has bounced back in 2015 and
the labour force participation rate has edged up.
Rapid house price increases have continued to diminish housing affordability and stimulate investment in
housing assets.
The economic outlook through 2017 is for further
expansion in this growth phase with employment
increasing at an above trend pace and the unemployment rate falling below seven per cent. Housing
market activity will continue to increase, with
continued growth in sales, prices and construction.
Non-residential building construction will increase
with only a small breather in 2016 public activity following a spike in 2015 and engineering construction
will likely expand. Population growth is seen edging
higher with a reversal in the international migration
trend and gains from interprovincial migrants.
A promising labour market development in 2015 has
been the large gain in full-time employment after a
lull in 2014. Full-time employment has rebounded
four per cent in 2015, while part-time employment
has declined by roughly a similar amount. The
implied increase in total hours worked suggests
stronger overall growth than headline total employment indicates.
Most employment growth in 2015 has been in three
service industries: professional, scientific and technical (PST); finance, insurance and real estate (FIRE);
and transportation and warehousing. Employment
growth in these industries has been partly offset by
notable declines in manufacturing and public administration. These trends have prevailed for at least
the past two years and are likely to continue through
2017, although public administration will probably
see some growth given the new federal government’s
agenda.
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Central 1 Credit Union
The main components of the PST industry are legal,
accounting, engineering, architectural, computer
systems, management and advertising services. Over
half the payroll jobs added in this industry over the
past two years in Ontario have been in computer
system design services. Advertising, public relations,
legal, management, scientific and technical services
have accounted for most of the rest of recent job
gains. These trends are likely to continue.
The main components of the FIRE industry are credit
intermediaries, securities dealers, insurance carriers,
asset managers, property lessors and managers,
real estate agents and appraisers, automobile and
equipment rental and leasing services. Most of the
jobs added in this industry over the past two years
in Ontario have been in property lessors, agents,
managers, appraisers and other real estate services.
Insurance carriers, asset managers and securities
brokers have accounted for most of the rest of recent
job gains. Payroll employment among credit intermediaries, mostly banks, has declined over the past two
years in Ontario. These trends are likely to continue.
Transportation and warehousing employment will be
up almost 10 per cent this year following an 11 per
cent drop last year. Despite recent variability, the
longer term trend continues to rise. Recent variability
could be due to sampling error in the Labour Force
Survey, rather than to real changes, in which case the
trend is more relevant.
Declines in manufacturing employment over the past
two years have been driven by computer, electronic, fabricated metal, food and printed products.
Transportation equipment manufacturing, mostly
automobiles and parts, has seen payroll employment
grow recently. Manufacturing will continue to face
crosscurrents. Ford’s plan to produce the Edge SUV
in Oakville and GT ‘supercar’ in Markham will create
jobs. General Motors’ plan to shift production of the
Camaro from Oshawa to Michigan will destroy jobs.
Bombardier plans to cut jobs at its Toronto plant due
to problems selling business jets.
Cost savings from the drop in oil prices and the competitive advantage gained from the lower Canadian
dollar, along with more demand from the strong
domestic economy in the U.S. will continue to work
in favour of local manufacturers. One downside from
the oil price drop is less demand for machinery and
equipment from energy companies in oil-producing
provinces and states.
Construction employment has posted a solid
gain in 2015 rising nearly six per cent. This is not
surprising given the large increase in residential and
non-residential building activity. Residential and
non-residential building permits posted double-digit
gains and engineering construction on transportation
projects advanced.
Toronto Economic Region Forecast
2012
2013
2014
2015
2016
2017
Employment (% ch.)
1.1
4.1
0.0
2.4
1.7
1.5
Unemployment Rate
8.8
8.2
8.0
7.3
6.9
6.7
MLS® Res. Sales (% ch.)
-3.9
0.9
4.9
8.3
6.4
4.3
7.2
5.1
8.2
9.2
8.7
7.3
MLS® Res. Avg. Price (% ch.)
Residential Permits (Units) (% ch.)
14.9
3.6
-12.7
19.5
10.7
4.3
Non-Residential Permits ($ vol) (% ch.)
0.2
3.3
-3.4
17.0
-1.4
8.7
Population (% ch.)
1.6
1.4
1.4
1.3
1.4
1.5
Toronto CMA Forecast
2012
2013
2014
2015
2016
2017
Employment (% ch.)
1.6
3.8
-0.2
3.2
1.9
1.7
Unemployment Rate
8.7
8.1
8.0
7.2
6.8
6.6
MLS® Res. Sales (% ch.)
-3.9
0.9
4.9
8.1
6.3
4.1
7.0
5.0
8.1
9.3
8.7
7.3
MLS® Res. Avg. Price (% ch.)
Residential Permits (Units) (% ch.)
16.2
3.9
-13.2
16.8
10.0
4.5
Non-Residential Permits ($ vol) (% ch.)
-0.9
6.5
-7.0
22.2
-2.9
9.0
1.7
1.5
1.5
1.4
1.5
1.5
Population (% ch.)
Sources: Statistics Canada, CREA, C1CU. Actuals 2012 to 2014.
Notes: Housing sales and prices represent combined activity in real estate boards within the region.
Toronto CMA approximated with combined from the Toronto Real Estate Board
Economic Analysis of Ontario
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Central 1 Credit Union
Job growth in the Toronto ER is forecast at 1.7 per
cent in 2016 and 1.5 per cent in 2017, compared
to an estimated 2.4 per cent in 2015. Forecast
job growth is led by technology services, business
services, real estate and financial services, transportation and construction. Gains are expected in
tourism-related industries along with trend growth in
education and health industries.
Some employment declines are likely in transportation manufacturing and possibly in overall manufacturing. There are signs of benefits from the low
Canadian dollar on more manufacturing exports but
it is not widespread. The improving U.S. economy in
2016 and 2017 should provide some additional lift.
However, restructuring and consolidation by foreignowned firms will continue.
Immigration will drive labour force growth but it will
remain subdued by demographics. The participation
rate is on a downward trend due to retiring baby
boomers and range-bound employment of younger
people and those with obsolete skills. Labour-force
growth is forecast at 1.6 per cent in 2016 and 1.2 per
cent in 2017, slightly lower than the estimated 1.3
per cent in 2015. The region’s unemployment rate
will trend lower through 2017 and beyond.
The labour market forecasts for the Toronto ER and
the Toronto Census Metropolitan Area (CMA) are
highly similar. Employment growth is slightly higher
and the unemployment rate slightly lower in the CMA
due to higher economic intensity. The economic
region is about five per cent larger in population
than the CMA, which excludes Oshawa, Burlington,
Clarington, Whitby, Scugog and Brock.
The high-profile Toronto housing market has led all
regions with the largest average price increase of
over nine per cent in 2015. The two index measures
for Toronto are showing gains of eight to nine per
cent. Toronto’s sales-to-new listings and sales-toactive listings ratios are the highest in several years,
which correlates well with substantial price increases.
Active listings are the lowest since the recession
and the flow of new listings is only three per cent
higher than last year, compared to a 10 per cent sales
increase. Supply is an issue affecting not only prices,
but at this pace, it will constrain sales.
With one of the more robust economies in Ontario,
Toronto’s housing market is seen posting further
gains in 2016 and 2017. Sales will climb as long
as the supply response gains momentum. There
is more upside to prices than forecast if listings do
Economic Analysis of Ontario
Full-time and Part-time Employment,
Toronto Region
Persons - thousands
Persons - thousands
620
2,800
Full-time(L)
Part-time
2,700
580
2,600
540
2,500
500
2,400
2005
2007
2009
2011
2013
2015
460
Source: Statistics Canada, Central 1 Credit Union. Latest: Year to October 2015
not respond and languish at the current low pace.
The average sale price will breach $700,000 during
2016 and $750,000 during 2017 though the annual
averages will be lower. New construction will also
climb but it can only meet part of the market’s supply
needs.
The underlying premise in our forecast is that low
mortgage rates, combined with employment and
income growth, will generate more housing activity, despite worsening affordability conditions and
mortgage rates edging higher. The homes and
buildings people want to own are in limited supply
and are located on land that cannot be reproduced.
As urbanization continues to intensify, land values will
continue to appreciate.
In the Toronto ER, housing unit sales via the Multiple
Listing Service (MLS®) are forecast to rise 6.4 per
cent in 2016 and 4.3 per cent in 2017 following
estimated growth of 8.3 per cent in 2015. The
average MLS® sale price is forecast to rise 8.7 per
cent in 2016 and 7.3 per cent in 2017, following an
estimated gain of 9.2 per cent in 2015.
Residential building permits are forecast to increase
10.7 per cent in 2016 and 4.3 per cent in 2017,
following estimated growth of 19.5 per cent in 2015.
The Toronto CMA housing forecast is highly similar
to the ER forecast. Most of the uplift in residential
construction is centred in multi-unit buildings in the
Toronto CMA, which are up 43 per cent through the
first 10 months of 2015. There is upside potential
in this forecast because a considerable amount of
pent-up household formation accumulated since the
recession seven years ago.
Renovation spending, which is larger than spending on new construction, is forecast to grow at a
good clip, averaging around 7.5 per cent annually
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Central 1 Credit Union
in current dollars and 5.0 per cent in 2007 dollars
through 2017. In addition to the aging of the housing
stock, renovation spending tends to increase at a
faster pace when the housing cycle is in an expansion
phase.
Investment in non-residential building construction in
the Toronto CMA continues to rise and was up almost
nine per cent through the third quarter of 2015
compared to last year. The increase is spread over
institutional, government, commercial and industrial
buildings. Non-residential building permits are up
22 per cent on the same basis. Permit growth, an
indicator of near-term investment spending, is mainly
in institutional, government and industrial projects.
Some examples of recently awarded construction
contracts for non-residential buildings include the
Milton District Hospital expansion, the GO Transit East
Rail Maintenance Facility in Whitby, and the ErinoakKids’ centres in Brampton, Mississauga and Oakville.
Engineering construction will continue in Toronto,
with the utilities and transportation industries
investing heavily in a number of major projects. These
include Phase II of the Highway 407 extension, the
Eglinton Crosstown and Sheppard Ave. East light
rapid transit projects, and the refurbishment of the
Darlington nuclear generating station.
Non-residential building permits in the Toronto CMA
are forecast to decline about three per cent in 2016,
following a 22 per cent jump in 2015. Higher activity is projected for 2017 and could be higher than
forecast, depending on the federal government’s
infrastructure initiatives.
Population growth in the Toronto CMA is forecast
to grow at 1.5 per cent annually in 2016 and 2017,
up from estimated growth of 1.4 per cent in 2015.
Immigration levels will remain high and the largest
source of growth, while fewer temporary foreign
workers will dampen growth. Net interprovincial
outflow looks to ease with Alberta’s recession. A
larger net outflow of population to other regions
in the province by a growing portion of retirees is
expected. Toronto’s growth with remain above the
provincial average and well above all other regions in
the province.
Kitchener-Waterloo-Barrie Economic Region
The Kitchener-Waterloo-Barrie Economic Region is
a large region containing about 10 per cent of the
province’s population, concentrated in the southern
Economic Analysis of Ontario
Unemployment Rates, KitchenerWaterloo-Barrie Region and Ontario
Per cent of labour force
10
Ontario
9
K-W-B
8
7
6
5
4
2007
2009
2011
2013
2015
2017
Source: Statistics Canada, Central 1 Credit Union. Forecast 2015 to 2017.
half anchored by the Kitchener-Cambridge-Waterloo
Census Metropolitan Area (CMA) and the Guelph
CMA. In the northern part, the Barrie CMA is the
principal centre among the neighbouring census
agglomerations of Orillia, Midland, and Collingwood.
The manufacturing and education industries standout
as the region’s most important export sectors, especially in its southern economies. Manufacturing plays
a smaller but important export role in the northern
economies, though education plays a lesser role than
in the south.
Economic growth in the Kitchener-Waterloo-Barrie
region so far in 2015 has been mixed and moderate overall. Employment and labour force growth
has slowed, though housing market activity and
residential construction have picked up. Investment
in non-residential building construction is up, while
non-residential building permits, a leading indicator
of investment, has declined. Population growth has
slowed slightly.
Employment was up about one per cent in the region
through October and the unemployment rate averaged 5.5 per cent, down slightly from last year. The
labour market was stronger than indicated by the
headline number with full-time employment up nearly
two per cent and part-time employment down.
There is a considerable divergence in employment
performance by CMA in the region. The Guelph CMA
has seen a 10 per cent jump so far in 2015, while
employment dipped 1.3 per cent in the KitchenerCambridge-Waterloo CMA and declined 2.5 per cent
in the Barrie CMA. Large swings in the Labour Force
Survey (LFS) results for smaller geographic areas raise
a cautionary flag that sample variability may account
for the change, rather than underlying trends or
forces.
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Central 1 Credit Union
Regional job growth in 2015 has been led by education, health, accommodation and food services, as
well as construction. Gains in these industries have
been largely offset by declines in information, culture,
recreation, professional and technical services,
business and building support, public administration,
retail and wholesale trade services, as well as agriculture.
Manufacturing in the region has fared well in comparison to other regions and to the province as a
whole. While manufacturing employment is lower in
the past 10 years, the contraction is not as deep as in
other regions and the province as a whole. Further
consolidation and restructuring will continue but
likely at a lesser pace and gains are more likely now
that external factors such as the lower loonie are
providing competitive support.
Some manufacturing companies continue to invest in
production capacity and add jobs, often with financial support from governments. Examples include
Wolf Steel and Streit Manufacturing in Barrie, Huawei
Technologies and DC Foods in Waterloo, Linamar Corporation and NSF Canada in Guelph, Heroux-Devtek
in Cambridge, Toyota Boshoku Canada in Elmira and
Howa Textile Industry in Alliston. However, General
Mills announced the closure of its Midland food
manufacturing plant in mid-2016, affecting approxi-
mately 100 employees. Also, Owens Corning will be
cutting more than 100 jobs at its fibreglass plant in
Guelph by 2016 when it shifts some production to
Mexico.
The technology sector in the Kitchener-CambridgeWaterloo CMA has faced some set-backs in 2015.
BlackBerry reduced smartphone operations and
announced two rounds of world-wide staff layoffs.
Open Text Corporation announced a five per cent
cut in its global workforce to streamline operations.
Some mitigation will come from Communitech
Corporation, which plans to establish the Open Data
Exchange, creating 370 direct and indirect jobs.
Over time, the region’s manufacturing sector will
experience improved profits and market share as a
result of the lower Canadian dollar and faster U.S.
economic growth. Lower oil prices and the expanded
transportation network will reduce costs.
The region’s economic outlook through 2017 is for
trend growth in employment and a slightly lower
unemployment rate. Housing market activity will
continue to increase with ongoing growth in sales,
prices, and construction. Non-residential building
construction will remain near current levels in the
near term and turn higher in 2017. Population
growth will remain near one per cent annually.
Kitchener-Waterloo-Barrie Economic Region Forecast
2012
2013
2014
2015
2016
2017
Employment (% ch.)
-0.2
2.8
1.6
1.1
1.1
1.3
Unemployment Rate
6.6
6.4
5.8
5.4
5.3
5.1
MLS® Res. Sales (% ch.)
2.5
3.6
2.1
9.9
5.4
4.3
MLS® Res. Avg. Price (% ch.)
-1.1
2.4
5.4
5.9
6.3
5.4
Residential Permits (Units) (% ch.)
-19.2
12.0
29.9
2.1
8.5
7.8
Non-Residential Permits ($ vol) (% ch.)
-29.6
-0.5
33.1
-8.2
8.3
19.2
1.2
1.1
1.0
0.8
0.8
1.0
Population (% ch.)
Kitchener-Cambridge-Wateroo CMA Forecast
2012
2013
2014
2015
2016
2017
Employment (% ch.)
0.4
2.7
1.5
-1.1
1.1
1.1
Unemployment Rate
6.6
6.9
6.4
5.9
5.6
5.3
MLS® Res. Sales (% ch.)
-0.7
3.1
0.5
6.8
6.7
5.2
MLS® Res. Avg. Price (% ch.)
3.3
2.9
5.5
2.7
5.0
4.7
Residential Permits (Units) (% ch.)
-32.9
6.6
53.4
-3.4
8.3
7.7
Non-Residential Permits ($ vol) (% ch.)
-38.1
-20.5
46.9
-3.3
1.9
18.2
1.2
0.8
0.8
0.7
0.8
0.9
Population (% ch.)
Sources: Statistics Canada, CREA, C1CU. Actuals 2012 to 2014.
Notes: Housing sales and prices represent combined activity in real estate boards within the region.
Kitchener-Cambridge-Waterloo CMA approximated with combined data from the Kitchener-Waterloo Association of
REALTORS® and Cambridge Association of REALTORS®
Economic Analysis of Ontario
14
Central 1 Credit Union
Job growth in the region is forecast at 1.1 per cent in
2016 and 1.3 per cent in 2017, similar to the estimated 1.1 per cent in 2015. Forecast job growth is
led by the services sectors such as health, education,
accommodation and food services. Construction
employment is also seen rising. The unemployment
rate will slide lower to 5.3 per cent in 2016 and 5.1
per cent in 2017, down from an estimated 5.4 per
cent in 2015. Labour market trends in the KitchenerCambridge-Waterloo CMA will track the region.
Housing market conditions have tightened considerably in recent months causing accelerating prices.
Sales in the first 10 months of 2015 were up almost
10 per cent year-over-year, while new listings were
up less than one per cent, pushing the sales-to-new
listings ratio to its highest in 10 years. The average
sale price accelerated at an eight per cent annual
rate in the third quarter, up from three per cent in
the first quarter of 2015. Indications point to further
acceleration in the near term until listings pick up, or
sales cool off.
Housing market activity is seen increasing in each
of the next two years against the backdrop of low
mortgage rates and some improvement in economic
and income growth in 2016 and 2017. In the Kitchener-Cambridge-Waterloo CMA, MLS housing unit sales
are forecast to rise 6.7 per cent in 2016 and 5.2 per
cent in 2017 following estimated growth of 6.8 per
cent in 2015. The average MLS sale price is forecast
to rise 5.0 per cent in 2016 and 4.7 per cent in 2017,
following an estimated gain of less than three per
cent in 2015. Higher housing market activity is also
forecast in the Guelph and Barrie CMAs.
Residential building permits are forecast to increase
through 2017 and follow rising housing sales and
prices. Permits surged in 2014 on a jump in multiunit buildings in the Kitchener-Cambridge-Waterloo
CMA and as a result permits are tracking slightly
lower in 2015.
Investment in non-residential building construction
in the region’s three CMAs was up almost 26 per
cent through the third quarter of 2015 compared
to last year. The increase was mainly in institutional
and government projects such as the $187 million
expansion of Cambridge Memorial Hospital, as well
as industrial buildings, while commercial building
construction was down. Construction was up in the
Kitchener-Cambridge-Waterloo and Barrie CMAs, but
down in the Guelph CMA.
Economic Analysis of Ontario
Non-residential building permits, an indicator of near
term investment spending, are down almost 11 per
cent on the same basis. Permit decline is mainly in
institutional and government buildings, while industrial permits are up and commercial permits are little
changed. Non-residential building permits are down
in all three CMAs of the region.
Examples of non-residential building construction are
the City of Cambridge’s Creekside Corporate Campus
multi-use industrial park, Canadian Forces Base Borden military housing and ammunition transit facility,
and Collingwood’s new École élementaire catholique
Notre-Dame-de-la-Huronie, which is scheduled to
open in September 2016. A number of manufacturing companies in the region are also investing in
expanded premises. The major engineering project
in the region through 2017 is the Waterloo rapid
transport system.
Non-residential building permits in the region are
forecast to remain near current levels in 2016 following an estimated decrease of 8.2 per cent in 2015.
Private investment will trend higher, while public
sector permits decline from 2014’s high. Nonresidential building and engineering construction
spending forecasts have upside potential due to the
new federal government’s infrastructure initiative.
Population in the region is forecast to grow just
under one per cent per year through 2017, on par
with estimated growth of 0.8 per cent in 2015. Net
in-migration, mostly from other parts of Ontario, will
account for more than half of total growth. Lower
net interprovincial out-migration is expected and
higher net international migration. Forecast population growth rates will be similar in all three CMAs in
the region.
Hamilton-Niagara Peninsula Economic Region
The Hamilton-Niagara Peninsula (HNP) Economic Region spans the three census metropolitan areas (CMA)
of Hamilton, St. Catharines-Niagara and Brantford,
and also covers Haldimand-Norfolk. The combined
region represents about 11 per cent of the provincial
population, about 1.43 million people.
The HNP region grew more rapidly in 2015 than it did
in 2014. Employment expanded at a faster pace and
more residential activity materialized as did nonresidential permits. Unlike 2014, most of this year’s
employment growth was outside the Hamilton CMA.
The St. Catharines-Niagara CMA led with a near five
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Central 1 Credit Union
per cent rise, followed by a substantial employment
gain outside the three CMAs in the region. Employment growth in the Brantford CMA is running at a 1.5
per cent pace this year with Hamilton CMA around
one per cent.
Labour market indicators of a regional and local
economy are the best available but not without
limitations. Statistics Canada’s household sample for
the Labour Force Survey (LFS) is subject to sample
variability, which can be large in smaller geographies
or industry sectors and result in swings unrelated
to underlying fundamentals or trends. The St.
Catharines-Niagara 2015 results are treated with
some caution for this reason.
The HNP region employment is rising around one
per cent annually and performance since 2013 has
exceeded that trend, implying a cyclical gain. Part
of this cyclical push is coming from the residential
and construction sectors. Service-producing industry
employment also contributed to the cyclical rise led
by education and business, building and support
services.
Full-time employment is well above trend growth for
the second year in a row posting near three per cent
gains annually. Most of the gains are centred in the
Hamilton and St. Catharines-Niagara CMAs. With
part-time employment down and full-time up, total
hours worked is higher which suggests economic
growth is higher than implied by headline total
employment growth.
The unemployment rate at six per cent is the lowest
in years. Hamilton’s rate will approach an average of
5.6 per cent in 2015 and in St. Catharines-Niagara it
will fall below seven per cent, the lowest since 2008.
Brantford’s rate is below five per cent.
A large reason behind the declining unemployment
rates is a lower rate of participation in the labour
force, especially since the 2008-09 recession. Had
the labour force participation rate remained roughly
the same as in 2008 and employment growth was
the unchanged, the region’s unemployment rate
would be closer to nine per cent, rather than six. This
is not unique to this region as a similar pattern plays
out in most regions in Canada.
Economic restructuring is an ongoing process, but
the major consolidation and closures in the manufacturing sector during the last decade and since the
last recession have subsided. Regional manufacturing
employment has stabilized at above 90,000 persons,
down from 135,000 persons in 2003. Manufacturing employment in Hamilton is up about eight per
cent this year with a similar gain recorded in the
Brantford CMA. A 10 per cent decline is evident in
the St. Catharines-Niagara CMA this year, the largest
Hamilton-Niagara Peninsula Economic Region Forecast
2012
2013
2014
2015
2016
2017
Employment (% ch.)
0.7
-1.2
1.3
2.2
1.7
1.4
Unemployment Rate
7.3
7.1
6.5
6.2
5.8
5.3
MLS® Res. Sales (% ch.)
-5.2
3.0
5.8
12.2
6.0
5.7
MLS® Res. Avg. Price (% ch.)
6.5
6.1
5.7
7.7
7.9
7.3
Residential Permits (Units) (% ch.)
Non-Residential Permits ($ vol) (% ch.)
Population (% ch.)
2.6
-8.1
2.3
17.9
8.3
7.7
100.7
-15.2
-29.7
8.0
4.2
20.0
0.8
0.9
0.8
0.7
0.8
1.0
2014
2015
2016
2017
Hamilton CMA Forecast
2012
2013
Employment (% ch.)
0.4
-0.5
2.4
1.1
1.5
1.5
Unemployment Rate
6.6
6.4
5.8
5.6
5.1
4.8
MLS® Res. Sales (% ch.)
-6.4
3.3
6.3
8.2
6.5
6.1
MLS® Res. Avg. Price (% ch.)
8.0
6.6
5.9
8.3
6.8
6.4
Residential Permits (Units) (% ch.)
2.2
-20.1
3.4
20.9
9.4
14.3
140.4
-39.7
-16.3
15.8
6.1
21.4
1.1
1.0
0.9
1.1
1.2
1.4
Non-Residential Permits ($ vol) (% ch.)
Population (% ch.)
Sources: Statistics Canada, CREA, C1CU. Actuals 2012 to 2014.
Notes: Housing sales and prices represent combined activity in real estate boards within the region.
Hamilton CMA approximated with data from the REALTORS® Association of Hamilton and Burlington
Economic Analysis of Ontario
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Central 1 Credit Union
since 2008, whereas previously employment was
range-bound and stable. Further restructuring in the
region’s manufacturing sector is still possible with
older, foreign-owned operations most at risk.
Service-producing industries share of the economy
and employment has risen to its highest point in
2015. The employment share of service industries
in the regions is 77 per cent, compared to 63 per
cent in 1987 and 70 per cent in 1996. The highest
share is in the St. Catharines-Niagara CMA, due to its
significant tourist industry, while the Hamilton CMA is
close behind on account of its trade, transportation,
education, health, and business services sectors.
Manufacturing Employment,
Hamilton-Niagara Region
Persons - thousands
180
160
140
120
100
80
1987
1994
2001
2008
2015
Source: Statistics Canada, Central 1 Credit Union. Note: 2015 estimated.
Housing and residential construction are important
growth drivers in the regional economy and will
reach multi-year highs in 2015. Low interest rates, an
improving economy and rising consumer confidence
have generated double-digit sales gains across the
region. The average sale price is up about eight
per cent to $380,000. Sales and price performance
this year is similar across the five real estate boards
comprising the HNP region.
External growth conditions are favourable for
improved economic growth in the HNP region. The
low Canadian dollar, faster U.S. growth, and robust
growth in the GTA will assist the region’s exports.
Alberta’s recession and a weak oil and gas sector will
continue to hamper exports into those areas. Moderate underlying growth trends will support domestic
demand, which will grow off low interest rates and
new fiscal stimulus.
Residential construction is on track this year to hit
its highest level since 2006 at a predicted 6,000
units, according to building permits issued. Permits
issued in the Hamilton CMA will increase just over 20
per cent to 3,200 units with the largest gain in the
Brantford CMA at around 60 per cent. Permits issued
in the St. Catharines-Niagara CMA will jump about 25
per cent.
Manufacturing, tourism, and transportation services
stand to benefit from more favourable external conditions and domestic sectors such as construction, real
estate, and retail trade will gain from low interest
rates and an improvement in economic conditions.
Non-residential permits in the Hamilton CMA
received a boost from government permits issued
in Burlington for the Joseph Brant Hospital. Total
non-residential permits will rise more than 15 per
cent in Hamilton and around eight per cent in the
HNP. However, private non-residential permit activity
is tracking below last year.
Some notable developments underway or on the
horizon are Fibracast’s plant in Stoney Creek that will
manufacture water treatment membranes, creating
about 100 jobs. Construction continues on the
Niagara Region Wind Farm project. A new manufacturing plant to make pre-cast parts for wind-turbine
towers for that project is underway, employing about
200 workers at its peak. While this is a short-term
fulfillment order, the plant could supply other wind
turbine projects. Hamilton International Airport will
have a new cargo hangar, which will add about 400
direct and indirect jobs when it is fully built.
Economic Analysis of Ontario
Above-trend employment growth is predicted for the
HNP region and the Hamilton CMA during the next
two years. This improved growth profile is relative
to the weak performance seen from the recession
through 2013 and reflects the end of the major
restructuring in the manufacturing sector. Some
further plant closures or operational downsizings are
possible, but not to the same extent as in the past
decade and a half.
Job growth is forecast at 1.7 per cent during 2016
in the HNP region, slightly lower than the 2.2 per
cent expected in 2015, but higher than every other
year since the recession. In the Hamilton CMA,
employment growth picks up to 1.5 per cent annually
through 2017 from 1.1 per cent in 2015. Hamilton’s
unemployment rate is forecast to decline to below
five per cent in 2017, while in the HNP region it will
decline, but remain above five per cent.
Robust housing market activity will extend into
2016 and 2017 with a slight slowing in the pace of
annual gains likely. Housing sales will set new record
highs along with housing prices. HNP region MLS®
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Central 1 Credit Union
residential sales of 28,000 units are forecast during
2017, up from 25,000 units expected in 2015, which
will be a record high. The forecast average sale price
will hit $440,000 in 2017, up from $380,000 in 2015.
New residential construction, measured by building
permits, also climbs each year in the forecast, reaching 7,000 units in 2017, not a record but the second
highest.
Those forecast regional housing trends are mirrored in and largely driven by the Hamilton CMA.
Hamilton-Burlington MLS® residential sales in 2015 at
15,500 units will exceed the previous record and will
continue to set new highs in 2016 and 2017 to reach
17,500 units. The average sale price will also set
new highs each year hitting $500,000 in 2017. New
construction will follow higher sales and prices.
Non-residential activity will also expand in the next
two years led mostly by private sector investments.
Total non-residential building permits in the HNP
region are estimated at $1 billion in 2016, driven by
a jump in commercial and industrial permits, while
public permits come off their 2015 high. The Hamilton CMA is predicted to lead the region due to its
declining vacancy rates and proximity to the GTA.
The region’s low population growth rates of the past
few years will gradually rise due to more in-migration.
Hamilton CMA’s growth rate is predicted to reach is
fastest pace in many years at 1.4 per cent in 2017.
The Hamilton CMA is an affordable alternative to
higher housing and land prices in the GTA and with
further improvements to the transportation network
this trend will extend and accelerate. This facilitates
and encourages the increasing economic integration
with the GTA economy.
London Economic Region
The London Economic Region (ER) covers Oxford,
Elgin and Middlesex counties and is home to over
670,000 residents. The region’s economic base is
relatively more concentrated in manufacturing and
agriculture, its primary export industries, and it has
a fairly broad service industry base led by financial
services, education and health. Its principal centre
is the London Census Metropolitan Area (CMA),
comprised of the cities of London and St. Thomas
and their neighbouring urban jurisdictions. The CMA
contains most of the region’s manufacturing base and
is home to over 500,000 residents.
Economic Analysis of Ontario
Employment, London Region
Persons - thousands
350
340
330
320
310
300
2001
2005
2009
2013
2017
Source: Statistics Canada, Central 1 Credit Union. Note: Forecast 2015 to 2017.
The region’s economy has experienced a slow but improving recovery from the last recession with several
key economic indicators still below pre-recession levels. Much of this performance is linked to the region’s
declining manufacturing sector and the resulting
negative spinoffs to the broader economy. External
conditions such as the depreciated Canadian dollar,
stronger U.S. growth, and lower oil prices seem to
have begun to stimulate more manufacturing exports
from the region.
Key indicators suggest economic performance in the
London ER has been moderate overall in 2015 compared to 10-year historical trends. Headline labour
market indicators have performed the best since the
recession with employment growth tracking above
two per cent led by full-time employment and the
unemployment rate falling to nearly six per cent. The
labour force participation rate has actually bumped
up after dropping for 10 straight years, likely due to
increased employment opportunities. Headline housing market indicators have been robust with sales on
track for the largest gain in several years and more
new construction has materialized. Non-residential
building permits have increased substantially for the
first time in four years.
The London CMA has accounted for all of the region’s
employment growth so far in 2015 with a near four
per cent gain putting total employment very close
to the 2007 pre-recession high. London’s housing
market has been more active this year as has nonresidential building construction.
Employment in goods-producing industries outpaced
service-producing industries by a wide margin. At
the regional level, goods employment led by manufacturing and construction jumped about 14 per
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Central 1 Credit Union
cent over the same period last year. Service industry
employment is down slightly so far in 2015 though
financial services, real estate, business services, and
professional, scientific and technical services had
notable gains.
Manufacturing employment in the London CMA has
surged more than 20 per cent to well above 30,000
persons so far in 2015. While very positive, it is not
certain that the entire increase is due to a real upshift
or partly due to sample variability in the Labour Force
Survey (LFS). Historically, large swings in LFS sample
results at the CMA industry level are often reversed
the next year, which requires some caution interpreting these results.
This year’s gain in construction employment is supported by more residential and non-residential investment as evidenced by building permits and housing
starts activity. London CMA housing starts were
up 11 per cent through to October this year. Nonresidential building construction investment spending
was up more than 20 per cent from the beginning of
this year to the third quarter in the London CMA.
The London region has seen substantial tightening
in housing market conditions since the beginning
of 2015. The sales-to-new listings ratio is at a postrecession high and prices are beginning to accelerate.
Since the recession, London’s market has been fairly
stable at lower sales levels with modest price increases. The larger sales jump in 2014 was a harbinger of
a market change and with sales up over 10 per cent
in 2015 and new listings lagging well behind, prices
are forecast to climb at a faster pace. A more robust
supply response from the existing housing stock and
new construction is very likely to continue.
Investment in non-residential building construction in
the London CMA was little changed through the third
quarter of 2015 compared to last year. Commercial
building construction was up, while institutional and
government building construction was down. Nonresidential building permits were up 51 per cent on
the same basis. Permit growth, an indicator of near
term investment spending, was mainly in institutional, government and commercial projects.
Recent economic trends in Ontario’s farm production
reveal modestly upward trends in overall price, quantity and revenue. Livestock and related products are
performing better than crops and related products.
Aggregate farm cash sales, production, value added
and product prices will likely continue to set new
record highs. The Canada-EU trade agreement (CETA)
will come into effect in 2016 presenting opportunities and challenges to this industry. It is expected to
present headwinds for dairy and cheese producers,
London Economic Region Forecast
2012
2013
2014
2015
2016
2017
Employment (% ch.)
1.0
0.3
0.3
2.2
0.9
1.2
Unemployment Rate
8.0
7.9
7.0
6.2
5.8
5.3
MLS® Res. Sales (% ch.)
-1.2
-0.0
6.4
11.5
10.3
4.7
MLS® Res. Avg. Price (% ch.)
3.2
2.4
3.6
3.7
6.5
7.2
39.1
-4.8
4.3
-6.5
13.8
12.1
-55.5
1.1
-12.4
16.7
2.0
10.0
1.0
0.8
0.6
0.7
0.7
0.8
Residential Permits (Units) (% ch.)
Non-Residential Permits ($ vol) (% ch.)
Population (% ch.)
London CMA Forecast
2012
Employment (% ch.)
1.9
2013
2014
-0.8
1.1
2015
2016
3.7
2017
1.2
2.0
Unemployment Rate
8.7
8.6
7.5
6.8
6.3
5.9
MLS® Res. Sales (% ch.)
0.0
-1.9
7.9
10.8
10.3
4.7
MLS® Res. Avg. Price (% ch.)
3.2
2.4
3.4
3.3
6.4
7.1
Residential Permits (Units) (% ch.)
38.9
3.3
5.4
-9.9
13.6
12.0
Non-Residential Permits ($ vol) (% ch.)
-63.0
-17.9
-5.0
44.7
-5.1
14.7
1.0
0.8
0.7
0.8
0.8
0.9
Population (% ch.)
Sources: Statistics Canada, CREA, C1CU. Actuals 2012 to 2014.
Notes: Housing sales and prices represent combined activity in real estate boards within the region.
London CMA approximated with data from the London & St. Thomas Association of REALTORS®
Economic Analysis of Ontario
19
Central 1 Credit Union
which will be ameliorated by subsidies, while exporters of pork and beef are expected to benefit.
The economic outlook through 2017 is for moderate
growth in employment and a declining unemployment rate, but rising housing market activity and
more residential and non-residential building construction. Population growth is expected to gradually
increase.
The outlook for manufacturing in the region is more
positive than at any time since the recession because
the loonie is low, the U.S. economy is trending higher,
and the restructuring and consolidation by foreignowned firms is mostly completed. In addition, General
Motors is investing $560 million in its Ingersoll plant
and expects to hire more than 200 workers over the
next year. An example of a negative development
is Caterpillar’s decision to lay off the remaining 50
employees at its Electro-Motive Diesel rail locomotive
office in London.
The outlook is positive for further gains in the housing
market against the backdrop of low mortgage rates
and some improvement in economic and income
growth in 2016 and 2017. In the London ER, housing sales via the Multiple Listing Service (MLS®) are
forecast to rise 10.3 per cent in 2016 and 4.7 per
cent in 2017, following estimated growth of 11.5 per
cent in 2015. The average MLS sale price is forecast
to rise 6.5 per cent in 2016 and 7.2 per cent in 2017,
following an estimated gain of 3.7 per cent in 2015.
Residential building permits are forecast to increase
13.8 per cent in 2016 and 12.1 per cent in 2017,
following an estimated contraction 6.5 per cent in
2015. The London CMA housing forecast is highly
similar to the ER forecast.
Non-residential building permits in the London CMA
are forecast to slip 5.1 per cent in 2016 and rebound
14.7 per cent in 2017, following an estimated
increase of 44.7 per cent in 2015. Non-residential
building and engineering construction could receive
a lift from federal government investment in infrastructure projects.
Population in the London CMA is forecast to grow
at 0.8 per cent in 2016 and 0.9 per cent in 2017, on
par with estimated growth of 0.8 per cent in 2015.
Net in-migration, mostly from other parts of Ontario,
will pick up and account for more than half of total
growth. The composition of growth is expected to
shift towards international sources and less interprovincial out-migration.
Economic Analysis of Ontario
Job growth in the London ER is forecast at 0.9 per
cent in 2016 and 1.2 per cent in 2017, compared to
an estimated 2.2 per cent in 2015. The slower 2016
growth rate is an adjustment to the likely LFS sampleinduced spike in 2015 and not to deterioration in
fundamentals. Forecast job growth is led by manufacturing, construction and real estate services. Labour
force growth will be aided by a rising participation
rate and is forecast at 0.5 per cent in 2016 and 0.7
per cent in 2017, up from an estimated 1.3 per cent
in 2015. The region’s unemployment rate will decline
to 5.8 per cent in 2016 and 5.3 per cent in 2017 from
an estimated 6.2 per cent in 2015. The London CMA
will continue to generate the bulk of regional jobs
given its more diversified industry base than in the
region of the region.
Windsor-Sarnia Economic Region
The Windsor-Sarnia ER covers Chatham-Kent, Essex and Lambton counties and is home to almost
640,000 residents. The region’s main export industries are manufacturing and agriculture. Its principal
centres are the Windsor Census Metropolitan Area
(CMA), with a population of 335,000, the ChathamKent Census Agglomeration (CA) with a population of
105,000, the Sarnia CA with a population of 90,000,
and the Leamington CA with a population of 50,000.
These urban centres contain most of the region’s
manufacturing base, while the rest of the region is
largely rural and agricultural.
The region’s economic recovery, led by the Windsor
CMA, has been slowly but steadily grinding higher
with few exceptions. External factors such as the
depreciated loonie, faster U.S. economic growth,
and lower oil prices are beginning to lift the region’s
outlook. In addition, local factors such as a new
and expanded transportation network and existing
manufacturing infrastructure will facilitate and
accommodate growth. During the next two years,
improved but still moderate growth is foreseen.
Total employment in the Windsor-Sarnia ER is on
track to decline two per cent in 2015, according to
Statistics Canada’s Labour Force Survey (LFS). This
employment decline has been led by transportation
and warehousing services, retail and wholesale
trade, and public administration. These declines have
been partly offset by job gains in finance, insurance
and real estate services, accommodation and food
services, construction and agriculture. LFS data can
be volatile over short time periods due to its small
20
Central 1 Credit Union
sample size and these results could reverse next year
without any change in labour market fundamentals.
In contrast to the Windsor-Sarnia ER, total employment in the Windsor CMA has increased so far in
2015. Employment growth of 1.5 per cent has been
led by finance, insurance and real estate services,
professional and business services, and construction.
Job growth in these industries has been partly offset
by job declines in transportation and warehousing,
retail and wholesale trade, and public administration.
The unemployment rate jump during 2015 in both
the region and the Windsor CMA is confirmed by
Employment Insurance (EI) data that displays a spike
in Essex County during March and April. EI counts
have since declined in Essex and Windsor CMA, but
remain higher in Lambton County than at the beginning of the year.
The Windsor CMA has seen substantial growth in
housing market activity in 2015, as foreshadowed
by a jump in the sales-to-new listings ratio in 2014.
Housing sales through October via the Multiple
Listing Service (MLS®) were up 17.7 per cent yearover-year, while the average sale price was up 4.7 per
cent on the same basis. Residential building permits
through September were up 42 per cent in units and
38 per cent in dollar value compared to the same
period a year earlier. With the sale-to-new listings
ratio continuing to rise, these market indicators suggest prices will climb at a faster pace through 2017.
A more robust supply response from the existing
housing stock and new construction is very likely to
continue.
Investment in non-residential building construction
in the Windsor CMA was down 14.7 per cent yearover-year through September as lower spending on
institutional and government projects outweighed
higher spending on industrial projects. However,
non-residential building permits were up 25 per
cent on the same basis, resulting in two consecutive
quarterly increases in investment spending.
Companies continue to invest in production capacity, such as Fiat Chrysler Automobiles spending $2
billion re-tooling the Windsor plant. CF Industries
announced a $105 million expansion of its urea
plant at the Courtright Nitrogen Complex in St. Clair
Township. With more favourable conditions generally
in manufacturing, Peterson Spring Canada Ltd. is
adding a new production line at its engineered-metal
products plant in Kingsville. Auto parts company TRW
Automotive will open a second location in Windsor
in January 2016 creating 60 jobs. The $125 million
BioAmber Inc. succinic acid plant in Sarnia opened in
August 2015. Plains Midstream Canada’s natural gas
liquids fractionation plant upgrades in Sarnia created
approximately 100 construction jobs in 2015.
Windsor-Sarnia Economic Region Forecast
2012
2013
Employment (% ch.)
1.2
-0.8
Unemployment Rate
9.2
8.4
MLS® Res. Sales (% ch.)
1.2
3.5
MLS® Res. Avg. Price (% ch.)
3.3
4.1
2014
1.4
2015
2016
2017
-2.0
1.4
1.0
8.1
8.6
8.2
8.0
1.8
12.7
9.7
6.9
4.1
3.4
6.2
7.3
Residential Permits (Units) (% ch.)
10.5
13.6
-8.1
2.1
10.7
9.7
Non-Residential Permits ($ vol) (% ch.)
45.6
-39.2
-4.6
8.1
13.3
11.8
0.1
-0.1
-0.1
-0.1
0.1
0.1
Population (% ch.)
Windsor CMA Forecast
2012
2013
2014
2015
2016
2017
Employment (% ch.)
3.7
1.0
0.3
1.5
1.7
1.2
Unemployment Rate
9.7
8.9
9.0
9.8
9.5
9.1
MLS® Res. Sales (% ch.)
2.7
5.1
-0.2
18.2
9.5
5.8
MLS® Res. Avg. Price (% ch.)
3.6
4.5
4.2
4.1
5.1
7.3
Residential Permits (Units) (% ch.)
Non-Residential Permits ($ vol) (% ch.)
Population (% ch.)
3.3
6.5
6.7
34.8
-9.1
20.0
165.0
-66.6
21.5
22.6
8.1
15.0
0.8
0.6
0.4
0.5
0.6
0.7
Sources: Statistics Canada, CREA, C1CU. Actuals 2012 to 2014.
Economic region housing sales and prices represent combined activity in real estate boards within the region.
Windsor CMA approximated with data from the Windsor-Essex County Association of REALTORS®
Economic Analysis of Ontario
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Central 1 Credit Union
Over time, the Windsor-Sarnia ER’s manufacturing
sector will experience improved profits and market
share as a result of the lower Canadian dollar and
faster U.S. economic growth. Lower oil prices and
the expanded transportation network will reduce
costs. New vehicle sales in the U.S. and Canada are
predicted to remain at recent high levels during the
next two years.
The construction industry will remain active, driven
by higher levels of residential and non-residential
building construction and government investment in
the Detroit River International Crossing bridge.
Recent economic trends in Ontario’s farm production
reveal modestly upward trends in overall price, quantity and revenue. Livestock and related products are
performing better than crops and related products.
Aggregate farm cash sales, production, value added
and product prices will likely continue to set new
record highs. The Canada-EU trade agreement (CETA)
will come into effect in 2016 presenting opportunities and challenges to this industry. It is expected to
present headwinds for dairy and cheese producers,
which may be ameliorated by subsidies, while exporters of pork and beef are expected to benefit. Locally,
phase 2 of the Truly Green tomato greenhouse
complex in Chatham is expected to be complete
soon with an additional 80 full-time workers required.
Expansion plans call for four different phases.
Job growth in the Windsor-Sarnia region is forecast at
1.4 per cent in each of 2016 and 1.0 per cent in 2017,
compared to an estimated 2.0 per cent decline in
2015. Forecast job growth is led by finance, insurance and real estate services, accommodation and
food services, and construction. Labour force growth
will be driven by a rising participation rate and is
forecast at 0.9 per cent in both 2016 and 2017, up
from an estimated 1.4 per cent decline in 2015. The
region’s unemployment rate will decline to eight per
cent in 2017. Job growth in the Windsor CMA is forecast to be more robust than in the region. However,
the unemployment rate in the CMA is forecast to
remain above nine per cent through 2017.
The outlook is positive for further gains in the housing
market against the backdrop of low mortgage rates
and some improvement in economic and income
growth in 2016 and 2017. In the Windsor CMA, MLS
housing unit sales are forecast to rise 9.5 per cent in
2016 and 5.8 per cent in 2017, following estimated
growth of 18.2 per cent in 2015. The average MLS
sale price is forecast to rise 5.1 per cent in 2016 and
Economic Analysis of Ontario
Population Growth, Windsor CMA and
Rest of Windsor-Sarnia Region
Per cent
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
2002
2005
2008
2011
2014
2017
Source: Statistics Canada, Central 1 Credit Union. Note: Forecast 2015 to 2017.
7.3 per cent in 2017, following an estimated gain of
4.1 per cent in 2015. Residential building permits
are forecast to decrease 9.1 per cent in 2016 but
rebound 20 per cent in 2017, following estimated
growth of 34.8 per cent in 2015. The Windsor-Sarnia
ER housing forecast is similar to the CMA forecast.
Non-residential building permits in the Windsor CMA
are forecast to increase 8.1 per cent in 2016 and 15
per cent in 2015, following an estimated increase of
22.6 per cent in 2015. The Windsor-Sarnia ER forecast is similar to the CMA although less robust due
to low capital intensity outside the main urban area.
Non-residential building and engineering construction spending could be higher than forecast if the
new federal government implements its agenda for
higher investment in infrastructure projects.
Population in the Windsor CMA is forecast to grow
at 0.6 per cent in 2016 and 0.7 per cent in 2017,
a gradual improvement on the estimated 0.5 per
cent growth in 2015. Net migration will account
for a larger share of total growth mainly from more
immigration and less out-migration to other provinces
and regions in Ontario.
Population growth for the Windsor-Sarnia ER through
2017 will improve but remain low and below the
Windsor CMA implying that the rest of the region
could see declining population.
Stratford-Bruce Peninsula Economic Region
The Stratford-Bruce Peninsula Economic Region covers the counties of Perth, Huron, Bruce, and Grey and
is home to about 300,000 residents. The region’s
economy is concentrated in the agriculture, utilities, and manufacturing industries with a relatively
small service sector. Over the past three decades
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Central 1 Credit Union
its economic makeup has changed little with only a
small shift towards service-producing industries.
The region’s labour market took a turn for the worse
in 2015, according to Statistics Canada Labour Force
Survey (LFS) data. Employment this year is on course
to decline more than four per cent from last year,
down to levels not seen since the late 1990s. While
employment growth had stalled since 2011, this
recent downturn is potentially a significant break
from trend.
This yea’s employment decline is centred in the
goods-producing industries with a more than 10
per cent drop. Agriculture accounts for most of this
decline followed by utilities and construction, while
manufacturing employment is up this year. Service
industries employment is up about one per cent.
Employment began 2015 at a level similar to 2014
but fell sharply in the second half accompanied by
a similar but smaller fall in the labour force. The
unemployment rate rose to about 6.5 per cent in the
fourth quarter from under five per cent in late 2014.
One cross-check to the labour market is Employment
Insurance (EI) data. EI regular beneficiary counts
have not risen in 2015 but rather are down which is
counter to the LFS readings. These two measures do
not, or need not, always agree but a discrepancy this
large suggests something could be amiss.
The labour force decline is a potential reason for the
employment decline in the LFS and could reverse next
year from a statistical perspective. Sample variability
in the LFS requires caution in assessing trend changes
that may be due to sample errors and it is too early to
conclude a trend change occurred in 2015.
Construction of the K2 and Goshen Wind energy projects wound down and they became operational in
2015, which contributed to the construction industry
job decline but does not account for the more than
3,000 person job loss. Agriculture employment fell
by more than 4,000 suggesting a sharp production
drop-off. Regional agriculture data are not available
but provincial data do not point to such a decline in
2015.
Residential is one sector that has kept expanding.
Building on last year’s gains, housing sales, prices,
and new construction rose in 2015. MLS® residential
sales will hit their highest level since 2007 thought
the average sale price will set another record high.
Resale market conditions have tightened. New
construction, measured by building permits, will jump
about 20 per cent above last year to the highest level
since 2010.
Non-residential permit activity will come in below
last year by about 10 per cent. Private investment
in industrial buildings shot up more than 50 per cent
to almost $230 million in 2014, but will not match
that this year and permits for commercial buildings
remained range-bound. Public building permit activity is tracking lower this year as well.
Population data for 2015 is not yet available from
Statistics Canada. The region’s population growth
as of July 1, 2014 was just above zero. It has been
hovering around zero for the past 10 years with
considerable variation across counties. The population in Huron County has declined for many years,
while Bruce, Grey and Perth Counties have gained
population since 2010.
The region’s net out-migration during 2011 and 2012
reversed in the two years ending 2014 due to a larger
influx of intraprovincial migrants. Huron County was
the only area not to see a turnaround in intraprovincial migration. Net interprovincial migration was
negative in all four counties in the region.
Stratford-Bruce Peninsula Economic Region Forecast
2012
2013
2014
2015
2016
2017
Employment (% ch.)
3.1
-1.4
0.3
-4.4
1.7
1.7
Unemployment Rate
4.8
5.7
4.8
5.8
5.8
5.4
MLS® Res. Sales (% ch.)
4.9
-2.8
8.6
7.0
4.7
3.3
MLS® Res. Avg. Price (% ch.)
1.0
2.9
3.3
4.9
3.7
3.5
Residential Permits (Units) (% ch.)
-6.0
0.8
0.7
20.9
13.2
10.0
Non-Residential Permits ($ vol) (% ch.)
15.2
0.4
33.2
-10.0
-1.6
8.1
-0.1
0.1
0.1
0.1
0.2
0.2
Population (% ch.)
Sources: Statistics Canada, CREA, C1CU. Actuals 2012 to 2014.
Notes: Housing sales and prices represent combined activity in real estate boards within the region.
Economic Analysis of Ontario
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Central 1 Credit Union
The 2016 and 2017 outlook for the region will likely
see performance around trend growth rates with further gains in residential activity, modest population
growth, and mixed industry performances. Employment is seen rebounding from 2015’s anomalous
drop and returning to prior trend levels, which implies
growth above 1.5 per cent annually. The unemployment rate will remain near current levels because the
labour force will also return to trend performance,
rising at roughly the same pace as employment.
The region’s large utilities sector is undergoing
significant expansion in renewable energy, specifically
wind generation. The Bruce Power nuclear facility is
undergoing maintenance programs with Unit 6 next
up. The longer term and more expensive refurbishment program await approval.
Agriculture is another important industry in the
region and production is weather dependent as well
as on market conditions. Relatively poor weather in
2014 had a negative effect on crop production with
some bounce back in 2015. Assuming no adverse
weather conditions, crop production will likely rise
over 2015 levels aided by higher wheat and soybean
prices. The region’s agricultural sector should perform well in the medium and longer term to meet
growing local and export demand, mainly to the
U.S. Increased processing of local production will be
another long term growth source.
The low Canadian dollar and improved growth in
southern Ontario will give local tourism a lift. While
currently not a large sector, there is potential for
modest expansion in the medium term.
Manufacturing continues to face a mixed future.
This year’s bump up in manufacturing employment
is an encouraging sign as is the fairly stable pattern
evident following the steep plunge between 2005
and 2010. It is likely the worst is over though further
restructuring or consolidations are possible. One
positive note is that Green Arc Tire Manufacturing in
St. Marys announced its intentions to start production within four months and hire about 340 workers.
Also in St. Marys, the Kraft Heinz plant is closing
affecting more than 200 jobs.
The region’s service sector is relatively small in comparison to other regions in Ontario and growing at
a low trend pace. Health and business services have
the strongest growth profile with mixed trends in
other service industries. The region’s small and geographically dispersed population base is a challenging
growth environment for service sector businesses.
Economic Analysis of Ontario
MLS Residential Sales,
Stratford-Bruce Region
Units
4,500
4,200
3,900
3,600
3,300
2005
2007
2009
2011
2013
2015
Source: CREA, Central 1 Credit Union. Note: 2015 estimated.
The housing market will continue to generate more
sales and higher prices in the low interest rate environment. MLS® residential sales are forecast to rise
each year through 2017, setting new highs each year.
The average sale price will match that performance
reaching $263,000 in 2017. Residential building
permits should continue to increase in response to
those market conditions.
Northeast Economic Region
The Northeast Economic Region covers Greater
Sudbury and the counties of Nipissing, Parry Sound,
Manitoulin, Sudbury, Timiskaming, Cochrane and
Algoma and is home to over 560,000 residents. The
region’s key industries are mining, forestry, and utilities. The Greater Sudbury CMA has 166,000 residents
and is the region’s main service and distribution hub.
The city’s major industries are education, healthsocial services, primary resources and retail-wholesale
trade.
The fortunes of the Northeast Economic Region are
closely entwined with the outlook for global markets
for primary products such as lumber, pulp, steel and
metals. Over the past decade, the downsizing of the
region’s forest sector has had a profound impact on
many communities and contributed to the migration
of people from the region to other parts of Canada.
Similarly, the mining sector has had to adapt to
significantly lower metals prices in the aftermath of
the 2008 global economic contraction. This year, a
downshift in Chinese economic growth has further
negatively impacted demand for metals, steel and
other commodities.
After a difficult year, some commodity markets
are beginning to find their footing. In particular,
Ontario’s forest sector is benefiting from firmer prices
and increased foreign demand, with overall forest
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Central 1 Credit Union
products shipments climbing 12 per cent in the first
nine months of 2015, compared to the same period
last year.
A strengthening U.S. economy, a weak Canadian
dollar and a rebound in housing markets bodes well
for forest products, particularly lumber. Diversification in wood product manufacturing is occurring with
Rentech Inc. targeting full production at its woodpellets plant in Wawa by mid-2016. To fully capitalize
on increasing demand, forest products firms in the
Northeast region, along with the provincial government, will need to be sensitive to the competitiveness challenges posed by rising electricity rates and
aging facilities.
After rallying earlier in the year, prices for key metals
– e.g., gold, nickel, copper and zinc – have resumed
their downward trend, though the weak Canadian
dollar has taken out some of the sting. New capacity contributed to a jump in gold production in the
Northeast in 2014, which appears to have been maintained in 2015, despite weaker gold prices. For the
province as a whole, gold production was relatively
unchanged (up 0.1 per cent) in the first nine months
of 2015, compared to the previous year. The Northeast’s share of total provincial production, however,
may have slipped somewhat given the recent closure
of the open-pit operation at the Black Fox mine near
Matheson.
First Nickel Inc. ceased production at its Lockerby
Mine in Sudbury affecting 115 employees.
Moving forward, activity in the mining sector will
be driven by the future path of metals prices. Little
improvement in nickel, copper, zinc and lead prices is
expected until 2017, while gold prices are expected
to be range-bound with a slight upward bias after
next year.
Meanwhile, steel producers have been struggling to
adapt to intense competition as a result of a global
supply glut, with negative repercussions for employment at both Essar Algoma and Tenaris Algoma
Tubes in Sault Ste. Marie. Essar was granted creditor
protection in November under the Companies’
Creditors Arrangement Act (CCAA), which requires
the company to come up with a sales transaction, or
a restructuring plan by the end of next summer. Tenaris has laid off more than 700 employees since last
December as it copes with weaker demand due to
reduced oil drilling activity and low-priced imports of
line pipe and oil country tubular goods. Preliminary
determinations of dumping and subsidizing against
foreign producers of carbon and alloy steel line pipe
and steel plate may provide temporary respite, but
the longer term fortunes of the industry will largely
hinge on how the global steel industry manages
excess production capacity.
Northeast Economic Region Forecast
2012
2013
2014
2015
2016
2017
Employment (% ch.)
-2.1
0.6
1.2
-2.5
0.4
0.4
Unemployment Rate
7.3
7.5
6.9
7.9
7.7
7.5
MLS® Res. Sales (% ch.)
-1.7
-5.3
-5.3
7.8
4.8
-1.5
MLS® Res. Avg. Price (% ch.)
4.7
1.2
1.8
-1.7
3.2
2.2
Residential Permits (Units) (% ch.)
Non-Residential Permits ($ vol) (% ch.)
Population (% ch.)
-7.5
-12.1
-20.1
5.5
-9.1
5.0
-16.4
6.2
17.3
-32.9
16.7
14.3
-0.2
-0.4
-0.3
-0.3
-0.3
-0.3
Greater Sudbury CMA Forecast
2012
2013
2014
2015
2016
2017
Employment (% ch.)
-1.6
3.1
-0.2
-0.2
0.4
0.5
Unemployment Rate
7.2
7.0
6.4
7.3
7.0
6.9
MLS® Res. Sales (% ch.)
-1.2
-6.9
-6.6
6.7
4.3
0.0
MLS® Res. Avg. Price (% ch.)
4.7
2.1
1.9
-3.0
1.4
0.8
Residential Permits (Units) (% ch.)
-25.8
-4.9
-18.3
-27.4
9.1
8.3
Non-Residential Permits ($ vol) (% ch.)
-17.2
46.7
38.6
-48.5
16.7
7.1
0.2
0.0
0.0
0.0
0.1
0.1
Population (% ch.)
Sources: Statistics Canada, CREA, C1CU. Actuals 2012 to 2014.
Notes: Housing sales and prices represent combined activity in real estate boards within the region.
Greater Sudbury CMA approximated with data from the Sudbury Real Estate Board
Economic Analysis of Ontario
25
Central 1 Credit Union
Against this backdrop, economic growth is expected
to remain sluggish as primary producers grapple
with tough markets and the population in the region
continues to slowly decline. In the meantime, labour
markets and consumer spending are projected to
remain weak as government investment and regional
population growth essentially stall over the forecast
period.
Very modest job growth, however, is expected
over the next two years, with government services,
retail-wholesale trade and manufacturing each
contributing. After jumping to a projected 7.9 per
cent in 2015, little improvement is forecast in the
unemployment rate over the forecast period as
population outflows are offset by a modest rise in the
labour force participation rate.
The industries contributing most to near-term
economic growth are retail-wholesale trade, healthsocial services and other services. Construction
contributes only marginally to forecast growth, while
any contribution from primary production will not
kick in until 2017. Economic output from education
services and public administration will be dampened
over the period as the provincial government ramps
up its efforts to balance its budget by 2017-2018 by
controlling spending.
The investment outlook is mixed. Both public-sector
and private-sector investment in non-residential
building construction declined in 2015. Going
forward, public-sector capital expenditures will
remain constrained by fiscal restraint, while several
major investment projects are expected to support
private sector investment in the region over the next
two years.
Non-residential investment in the Greater Sudbury
CMA fell to traditional levels in 2015, after a temporary boost in investment in commercial construction
in 2014 and is expected to recover modestly in 2016
and 2017. However, the investment climate is not
conducive to a sustained market-wide investment upturn and will be more dependent on project-specific
investments.
A number of major projects in the region will contribute to other investment spending and employment
over the forecast period. Following the completion
of the $2.6 billion Lower Mattagami River hydro project, the $300 million New Post Creek hydroelectric
development will step to the fore with construction
on the project expected to ramp up in 2016, with a
Economic Analysis of Ontario
MLS Residential Sales,
Northeast Region
Units
8,000
7,500
7,000
6,500
6,000
5,500
5,000
2005
2007
2009
2011
2013
2015
Source: CREA, Central 1 Credit Union. Note: 2015 estimated.
scheduled 2018 completion date. As well, the development and conversion of the Energy East Pipeline,
which cuts across the Northeast ER, will support more
than $700 million in construction activity through to
its expected completion in 2018.
Housing market activity tends to track local economic
and population trends as well as broader factors such
as mortgage rates. But notwithstanding ongoing
net out-migration and negative employment growth,
regional unit sales rose an estimated 7.8 per cent
in 2015, after three consecutive years of decline, as
markets continued to benefit from low mortgage
interest rates. Nonetheless, the relatively buoyant
sales activity belies underlying weakness in Sudbury,
Sault Ste. Marie, Timmins and North Bay, where average sales prices have slipped year-to-date. Bucking
the trend, both unit sales and average sales prices
have increased in Parry Sound so far this year.
Range-bound housing sales and prices are expected
over the forecast period. Regional sales are forecast
to rise moderately in 2016 before slipping slightly in
2017. The average sale price will edge higher buoyed
by the positive effect of continuing low interest rates
on affordability.
As housing markets are largely local in nature, some
variances from the regional forecast will play out.
After rebounding somewhat in 2015, the housing
market in North Bay is expected to remain relatively
weak, absent a material change in the city’s modest economic prospects. Housing markets in Parry
Sound are expected to continue to outperform other
markets in the region, while the average sale price in
Sudbury will likely trail the regional average amid the
muted outlook for mining and ongoing public-sector
restraint.
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Central 1 Credit Union
Residential construction generally tracks housing
sales and should benefit from increased resale activity
in 2016, though much of the activity will be driven by
the replacement of older housing stock rather than
new household formation. Residential permits issued
in the Greater Sudbury CMA will decline an estimated
27 per cent in 2015, compared to a 5 per cent rise
in the rest of the Northeast. Still high rental vacancy
rates in Greater Sudbury will dampen overall starts in
the region, particularly for rental apartments.
Total employment in the Greater Sudbury CMA is
forecast to slip 0.2 per cent in 2015 and edge higher
in 2016 and 2017. The unemployment rate in 2015
jumped to an expected 7.3 per cent from 6.4 per
cent in 2014 and will edge lower as employment
growth exceeds growth in the labour force due to aging demographics and out-migration. The unemployment rate in the Greater Sudbury CMA is predicted to
decline to 6.9 per cent over the same period.
Northwest Economic Region
The Northwest ER covers the counties of Thunder
Bay, Rainy River and Kenora and is home to almost
240,000 residents. The region’s export industries are
mining, forestry, transportation services and manufacturing. Last year, the region’s economy sputtered
with employment slipping for the second consecutive
year. While economic activity is forecast to stabilize,
economic growth will be minimal with foundational
sectors such as health care, education and forest
products providing the main support. Primary
resources will continue to drive the region’s economy,
although construction, manufacturing, utilities and
a variety of service industries will also contribute.
Mining is expected to remain in a holding pattern
awaiting the next upcycle once the global economy
begins to pick up steam.
The Thunder Bay CMA is the region’s principal centre
with a population of 125,100. The core metropolitan
area has a more diversified and service-oriented economy than the rest of the region. Its strategic location
on the Great Lakes also makes it a transportation hub
for the region and Western Canada.
After rallying earlier in the year, prices for key metals
– e.g., gold, nickel, copper and zinc – have resumed
their downward trend, though the weak Canadian
dollar has partly mitigated their impact. For the
province as a whole, gold production was relatively
unchanged (up 0.1 per cent) in the first nine months
of 2015 compared to the previous year.
Economic Analysis of Ontario
MLS Residential Average Sale Price,
Northwest Region
Dollars - thousands
240
220
200
180
160
140
120
100
2005
2007
2009
2011
2013
2015
Source: CREA, Central 1 Credit Union. Note: 2015 estimated.
Going forward, activity in the mining sector will be
driven by the future path of metals prices. Little
improvement in nickel, copper, zinc and lead prices is
expected until 2017, while gold prices will be rangebound with a slight upward bias after next year. Iron
ore prices are expected to remain depressed throughout the period.
As a result, mining activity in the region, as well as
the timing of a number of major mining projects, will
depend on the outlook for a sustained recovery in
metals prices. For example, Rubicon Minerals Corp.
suspended activity at its new Red Lake Phoenix gold
mine in November with the announcement of a temporary layoff of 330 employees. The resumption of
production at the site will hinge on the development
of a plan to profitably extract gold from its “geologically complex” deposit. Similarly, delays in other gold
projects such as Newgold’s Rainy River Gold project
and the Hammond Reef Gold Mine, north of Atikokan,
are likely at current depressed prices.
Over the longer term, the eventual development of
the Ring of Fire, one of the largest chromite deposits
in the world, would make a significant contribution to
the Northwest economy. At present, its development
has stalled in face of uncertainty about government
support, private investor commitment and difficult
negotiations with First Nations’ communities near
the deposit. The lack of adequate transportation
infrastructure is a significant barrier to the region’s
development. The province has committed $1 billion
towards infrastructure development in the region
and has nominated the region as one of its “priority
transit projects” for federal Build Canada funding.
A strengthening U.S. economy and a rebound in
housing markets bode well for the Northwest’s forest
products industry. While initially slow off the mark,
27
Central 1 Credit Union
Ontario forest products producers have boosted
exports in response to rising demand south of the
border. Ontario’s forest sector is benefiting from
firmer prices and increased foreign demand, with
overall forest products shipments climbing 12 per
cent in the first nine months of 2015 compared to
the same period last year. To capitalize on increasing demand, forest products firms, along with the
provincial government, must continue to address the
competitiveness challenges posed by rising electricity
rates and aging facilities.
In this vein, the ongoing $250-million conversion of
the Terrace Bay Pulp Mill to dissolving pulp and the
addition of a second co-generation turbine at the facility will open up new opportunities for the company
in a growing market. Similarly, the conversion of the
Atikokan coal generating plant to biomass in 2014
has provided a significant market for wood-pellet
manufacturers in the region.
As the service centre for the Northwest region,
the outlook for the Thunder Bay CMA hinges partly
on economic activity elsewhere in the region. Its
economy will be underpinned by modest growth in
public sector activities such as health care, education
and public administration. Manufacturing will also
benefit from stronger U.S. demand and a weaker
Canadian dollar.
Bombardier’s transportation facility’s well-publicized
delivery delays of Toronto streetcars and accompanying quality problems have cast a bit of a shadow on
its ability to win future contracts. The company is
reportedly addressing these issues. In the meantime,
its order book is full and the company is working on
speeding up production at its Thunder Bay facilities,
which should sustain employment over the forecast
period.
The Port of Thunder Bay has recorded strong shipments for the year to date, although tonnage is 10.4
per cent below that of 2014, which was boosted by
a bumper year for grain shipments. Still, year-to-date
grain tonnage, at 5.7 million metric tonnes, was 23
per cent higher than the five-year average. With
grain accounting for about 90 per cent of shipments
through the port, future shipment levels will largely
depend on grain production in Western Canada.
Barring more bumper crops in the next two years, a
modest easing of shipments through the port cannot
be ruled out.
Non-residential building permits in the Northwest
ER are projected to move higher after recovering in
2015. Residential construction is forecast to edge
up over the next two years underpinned by modest
population inflows into Thunder Bay and the replacement of older housing stock. Regional residential
Northwest Economic Region Forecast
2012
2013
2014
2015
2016
2017
Employment (% ch.)
2.4
0.2
-2.3
-2.5
0.2
0.2
Unemployment Rate
6.8
7.3
5.9
6
5.8
5.4
MLS® Res. Sales (% ch.)
-1.0
-0.1
10.3
1.6
4.3
4.2
11.0
6.9
7.1
5.3
2.3
2.2
Residential Permits (Units) (% ch.)
-28.0
4.9
-13.6
2.8
6.3
-5.9
Non-Residential Permits ($ vol) (% ch.)
75.5
-21.8
-55.6
27.9
27.3
7.1
-0.1
-0.3
-0.1
-0.2
0.1
0.0
MLS® Res. Avg. Price (% ch.)
Population (% ch.)
Thunder Bay CMA Forecast
2012
2013
2014
2015
2016
2017
Employment (% ch.)
2.5
1.6
-2.1
-3.3
3.0
0.5
Unemployment Rate
5.5
6.1
5.2
5.1
5.2
5.0
MLS® Res. Sales (% ch.)
-1.0
-0.1
10.3
1.6
3.3
0.0
MLS® Res. Avg. Price (% ch.)
11.0
6.9
7.1
5.3
2.3
2.2
Residential Permits (Units) (% ch.)
-23.7
2.1
-8.4
-5.1
5.0
3.2
Non-Residential Permits ($ vol) (% ch.)
111.5
-4.6
-66.3
73.1
-22.2
21.4
0.1
-0.0
-0.1
0.0
0.1
0.2
Population (% ch.)
Sources: Statistics Canada, CREA, C1CU. Actuals 2012 to 2014.
Notes: Housing sales and prices represent combined activity in real estate boards within the region.
Thunder Bay CMA approximated with data from the Thunder Bay Real Estate Board and is identical to Economic Region
Economic Analysis of Ontario
28
Central 1 Credit Union
permits are expected to remain range-bound, following an estimated 2.8 per cent increase in 2015.
Housing sales and prices will rise moderately through
2017, supported by a relatively stable economy, low
mortgage rates, and affordable prices. Regional
sales are projected to increase 1.6 per cent in 2015
and slightly above four per cent in 2016 and 2017,
following a 10.3 per cent rise in 2014. After a 7.1 per
cent gain last year, the average sale price is projected
to rise 5.3 per cent in 2015, but is forecast to grow at
just over two per cent during the following two years.
Although the available MLS® data does not provide
a breakout for the Thunder Bay CMA, the increase in
the average sales price in the CMA is expected to be
somewhat higher there than elsewhere in the region.
After a large dip in 2014, private and public investment in non-residential building construction is
forecast to rise over the next two years, though fiscal
constraints are expected to dampen growth in public
investment.
Job growth will be negligible though a declining
labour force due to an aging population and the
negative effect of constrained job prospects on
participation in the labour force will see the unemployment rate decline to 5.4 per cent by 2017.
Total regional employment is expected to continue
to trend lower, after falling a projected 2.5 per cent
in 2015, with employment forecast to decline 0.2 per
cent in 2016. Nonetheless, the unemployment rate is
expected to edge lower as the labour force participation rate declines, due to aging demographics and
weak labour markets. The regional unemployment
rate is forecast to drop to 5.4 per cent by 2017,
well below its peak of 8.9 per cent in 2009. The
unemployment rate in the Thunder Bay CMA is
predicted to decline to 5.0 per cent over the same
period.
Population growth in the Northwest ER is expected
to remain essentially flat despite employer efforts
to attract new skilled workers to replenish an aging
workforce. This challenge will be most acute in
outlying regions as new mining and construction
opportunities emerge.
Helmut Pastrick
Chief Economist, Central 1 Credit Union
[email protected]
www.central1.com
905.282.8419
Steve Stinson
Senior Economist Ontario, Central 1 Credit Union
[email protected]
www.central1.com
905.282.8542
David Hobden
Senior Financial Economist, Central 1 Credit Union
[email protected]
www.central1.com
905.238.9400, ext. 5063
Bryan Yu
Senior Economist B.C., Central 1 Credit Union
[email protected]
www.central1.com
905.238.9400, ext. 5346
Terms
Published by the Economics Department of Central 1 Credit Union, 1441 Creekside Drive, Vancouver, B.C. V6J 4S7 © Central 1 Credit Union, 2011.
This work may not be reproduced in whole or part, by photocopy or other means, without permission of Central 1 Credit Union.
Economic Analysis of Ontario (the “Analysis”) may have forward-looking statements about the future economic growth of the Province of Ontario and its regions.
These statements are subject to risk and uncertainty. Actual results may differ due to a variety of factors, including regulatory or legislative developments,
competition, technological change, global capital market activity and general economic conditions in Canada, North America or internationally. This list is not
exhaustive of the factors that may affect any of the Analysis’ forward-looking statements. These and other factors should be considered carefully and readers should
not place undue reliance on the Analysis’ forward-looking statements.
The Analysis and Central 1 Credit Union disclaims any and all warranties, whether express or implied, including (without limitation) any implied warranties of
merchantability or fitness for a particular purpose. The Analysis and Central 1 Credit Union will not accept any responsibility for the reader’s use of the data and / or
opinions presented in the Analysis, or any loss arising therefrom.
Chief Economist: Helmut Pastrick Senior Economist, Ontario: Steve Stinson Senior Financial Economist: David Hobden Senior Economist, BC: Bryan Yu
Production: Judy Wozencroft
Economic Analysis of Ontario
29
Central 1 Credit Union
Appendix Tables - Regional Summary
Labour Force . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Unemployment Rate . . . . . . . . . . . . . . . . . . . . . . 31
Non-residential Building Permit . . . . . . . . . . . . .32
Residential Building Permits . . . . . . . . . . . . . . . .33
MLS Residential Sales. . . . . . . . . . . . . . . . . . . . . .34
MLS Residential Average Sale Price, . . . . . . . . . .35
Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Ontario Forecast Summary. . . . . . . . . . . . . . . . .37
Key External Economic Forecasts. . . . . . . . . . . .37
Labour Force (000s), Regional Summary
Economic Region
2012
Ottawa
% ch.
Kingston-Pembroke
% ch.
Muskoka-Kawarthas
% ch.
Toronto
% ch.
Kitchener-Waterloo-Barrie
% ch.
Hamilton-Niagara Peninsula
% ch.
London
% ch.
Windsor-Sarnia
% ch.
Stratford-Bruce Peninsula
% ch.
Northeast
% ch.
Northwest
% ch.
Ontario
% ch.
2013
2014
2015
2016
2017
742.7
731.7
746.9
736.0
743.0
752.0
2.3
-1.5
2.1
-1.5
1.0
1.2
230.3
230.2
229.3
218.0
223.0
228.0
-2.0
-0.0
-0.4
-4.9
2.3
2.2
185.2
182.9
198.8
182.9
189.0
190.0
-3.9
-1.2
8.7
-8.0
3.3
0.5
3411.3
3,528.8
3,524.7
3,580.0
3,625.0
3,670.0
1.5
3.4
-0.1
1.6
1.3
1.2
722.5
741.2
747.8
753.0
760.0
768.0
-0.8
2.6
0.9
0.7
0.9
1.1
760.8
751.2
755.9
770.0
779.0
786.0
0.7
-1.3
0.6
1.9
1.2
0.9
350.8
351.3
349.3
354.0
355.6
358.0
0.4
0.1
-0.6
1.3
0.5
0.7
327.4
322.2
325.3
320.6
323.4
326.2
1.4
-1.6
1.0
-1.4
0.9
0.9
160.4
159.8
158.7
153.5
156.0
158.0
-3.9
-0.4
-0.7
-3.3
1.6
1.3
275.6
274.3
275.8
272.0
272.5
273.0
-2.8
-0.5
0.5
-1.4
0.2
0.2
109.5
110.2
106.2
103.5
103.1
102.9
2.0
0.6
-3.6
-2.5
-0.4
-0.2
7276.5
7,383.8
7,418.7
7,443.5
7,529.6
7,612.1
0.7
1.5
0.5
0.3
1.2
1.1
Source: Statistics Canada, Central 1 Credit Union. 2015 estimated, forecasts 2016 and 2017
Economic Analysis of Ontario
30
Central 1 Credit Union
Employment (000s), Regional Summary
Economic Region
2012
Ottawa
% ch.
Kingston-Pembroke
% ch.
Muskoka-Kawarthas
% ch.
Toronto
% ch.
Kitchener-Waterloo-Barrie
% ch.
Hamilton-Niagara Peninsula
% ch.
London
% ch.
Windsor-Sarnia
% ch.
Stratford-Bruce Peninsula
% ch.
Northeast
% ch.
Northwest
% ch.
Ontario
% ch.
2013
2014
2015
2016
2017
695.0
684.5
697.8
688.5
696.0
708.0
2.3
-1.5
1.9
-1.3
1.1
1.7
213.7
213.9
210.1
203.0
207.0
211.0
-1.8
0.1
-1.8
-3.4
2.0
1.9
171.0
168.5
186.3
168.6
174.0
176.0
-2.6
-1.5
10.6
-9.5
3.2
1.1
3,112.3
3,240.2
3,241.1
3,320.0
3,375.0
3,425.0
1.1
4.1
0.0
2.4
1.7
1.5
674.7
693.5
704.5
712.0
720.0
729.0
-0.2
2.8
1.6
1.1
1.1
1.2
705.7
697.5
706.4
722.0
734.0
744.0
0.7
-1.2
1.3
2.2
1.7
1.4
322.7
323.7
324.8
332.0
335.0
339.0
1.0
0.3
0.3
2.2
0.9
1.2
297.4
295.1
299.1
293.0
297.0
300.0
1.2
-0.8
1.4
-2.0
1.4
1.0
152.8
150.6
151.1
144.5
147.0
149.5
-3.1
-1.4
0.3
-4.4
1.7
1.7
255.3
253.7
256.8
250.5
251.5
252.5
-2.1
-0.6
1.2
-2.5
0.4
0.4
102.0
102.2
99.8
97.3
97.1
97.3
2.4
0.2
-2.3
-2.5
-0.2
0.2
6,702.6
6,823.4
6,877.8
6,931.4
7,033.6
7,131.3
0.7
1.8
0.8
0.8
1.5
1.4
Source: Statistics Canada, Central 1 Credit Union. 2015 estimated, forecasts 2016 and 2017
Unemployment Rate (%), Regional Summary
Economic Region
2012
2013
Ottawa
6.4
6.5
Kingston-Pembroke
7.2
Muskoka-Kawarthas
7.7
Toronto
8.8
8.2
Kitchener-Waterloo-Barrie
6.6
6.4
Hamilton-Niagara Peninsula
7.2
7.1
2014
2015
2016
2016
6.6
6.5
6.3
5.9
7.1
8.4
6.9
7.2
7.5
7.9
6.3
7.8
7.9
7.4
8.0
7.3
6.9
6.7
5.8
5.4
5.3
5.1
6.5
6.2
5.8
5.3
London
8.0
7.9
7.0
6.2
5.8
5.3
Windsor-Sarnia
9.2
8.4
8.1
8.6
8.2
8.0
Stratford-Bruce Peninsula
4.7
5.8
4.8
5.9
5.8
5.4
Northeast
7.4
7.5
6.9
7.9
7.7
7.5
Northwest
6.8
7.3
6.0
6.0
5.8
5.4
Ontario
7.9
7.6
7.3
6.9
6.6
6.3
Source: Statistics Canada, Central 1 Credit Union. 2015 estimated, forecasts 2016 and 2017
Economic Analysis of Ontario
31
Central 1 Credit Union
MLS Residential Sales (units), Regional Summary
Economic Region
Ottawa
% ch.
Kingston-Pembroke
% ch.
Muskoka-Kawarthas
% ch.
Toronto
% ch.
Kitchener-Waterloo-Barrie
% ch.
Hamilton-Niagara Peninsula
% ch.
London
% ch.
Windsor-Sarnia
% ch.
Stratford-Bruce Peninsula
% ch.
Northeast
% ch.
Northwest
% ch.
Ontario
% ch.
2012
2013
2014
2015
2016
2017
17,184
16,539
16,472
17,900
18,500
19,500
0.2
-3.8
-0.4
8.7
3.4
5.4
7,685
7,272
7,095
7,700
8,200
8,500
3.0
-5.4
-2.4
8.5
6.5
3.7
6,722
6,728
7,095
8,250
9,000
9,600
2.5
0.1
5.5
16.3
9.1
6.7
93,765
94,588
99,193
107,400
114,300
119,200
-3.9
0.9
4.9
8.3
6.4
4.3
20,620
21,374
21,831
24,000
25,300
26,400
3.0
3.7
2.1
9.9
5.4
4.3
20,572
21,048
22,274
25,000
26,500
28,000
-5.2
2.3
5.8
12.2
6.0
5.7
9,787
9,783
10,405
11,600
12,800
13,400
-1.2
-0.0
6.4
11.5
10.3
4.7
7,834
8,110
8,255
9,300
10,200
10,900
1.2
3.5
1.8
12.7
9.7
6.9
3,806
3,700
4,017
4,300
4,500
4,650
4.9
-2.8
8.6
7.0
4.7
3.3
6,515
6,167
5,842
6,300
6,600
6,500
-1.7
-5.3
-5.3
7.8
4.8
-1.5
2,056
2,053
2,264
2,300
2,400
2,500
-1.0
-0.1
10.3
1.6
4.3
4.2
196,546
197,362
204,743
224,050
238,300
249,150
-1.9
0.4
3.7
9.4
6.4
4.6
Source: CREA, Central 1 Credit Union. 2015 estimated, forecasts 2016 and 2017
Economic Analysis of Ontario
32
Central 1 Credit Union
MLS Residential Average Sale Price ($), Regional Summary
Economic Region
Ottawa
% ch.
Kingston-Pembroke
% ch.
Muskoka-Kawarthas
% ch.
Toronto
% ch.
Kitchener-Waterloo-Barrie
% ch.
Hamilton-Niagara Peninsula
% ch.
London
% ch.
Windsor-Sarnia
% ch.
Stratford-Bruce Peninsula
% ch.
Northeast
% ch.
Northwest
% ch.
Ontario
% ch.
2012
2013
2014
2015
2016
2017
327,656
334,320
339,785
346,000
355,000
365,000
2.4
2.0
1.6
1.8
2.6
2.8
240,440
247,163
247,935
260,000
275,000
285,000
2.5
2.8
0.3
4.9
5.8
3.6
292,640
302,268
320,936
337,000
360,000
375,000
2.1
3.3
6.2
5.0
6.8
4.2
504,377
529,948
573,183
625,800
680,400
730,100
7.2
5.1
8.2
9.2
8.7
7.3
299,767
311,530
328,492
348,000
370,000
390,000
3.8
3.9
5.4
5.9
6.3
5.4
314,450
333,673
352,833
380,000
410,000
440,000
6.5
6.1
5.7
7.7
7.9
7.3
237,516
243,155
251,964
261,300
278,200
298,100
3.2
2.4
3.6
3.7
6.5
7.2
172,177
179,294
186,650
193,000
205,000
220,000
3.3
4.1
4.1
3.4
6.2
7.3
219,790
226,108
233,598
245,000
254,000
263,000
1.0
2.9
3.3
4.9
3.7
3.5
209,857
212,386
216,113
212,500
219,300
224,125
4.7
1.2
1.8
-1.7
3.2
2.2
182,447
195,100
208,909
220,000
225,000
230,000
11.0
6.9
7.1
5.3
2.3
2.2
384,849
403,060
431,543
463,123
498,701
531,532
5.3
4.7
7.1
7.3
7.7
6.6
Source: CREA, Central 1 Credit Union. 2015 estimated, forecasts 2016 and 2017
Economic Analysis of Ontario
33
Central 1 Credit Union
Residential Building Permits (units), Regional Summary
Economic Region
2012
Ottawa
% ch.
Kingston-Pembroke
% ch.
Muskoka-Kawarthas
% ch.
Toronto
% ch.
Kitchener-Waterloo-Barrie
% ch.
Hamilton-Niagara Peninsula
% ch.
London
% ch.
Windsor-Sarnia
% ch.
Stratford-Bruce Peninsula
% ch.
Northeast
% ch.
Northwest
% ch.
Ontario
% ch.
2013
2014
2015
2016
2017
8,211
6,643
8,391
5,700
6,300
6,800
2.7
-19.1
26.3
-32.1
10.5
7.9
1,928
2,050
1,850
2,100
2,300
2,500
-6.7
6.3
-9.8
13.5
9.5
8.7
1,737
1,819
2,208
1,850
2,000
2,250
8.0
4.7
21.4
-16.2
8.1
12.5
38,841
40,256
35,136
42,000
46,500
48,500
14.9
3.6
-12.7
19.5
10.7
4.3
6,325
7,084
9,204
9,400
10,200
11,000
-19.2
12.0
29.9
2.1
8.5
7.8
5,416
4,975
5,091
6,000
6,500
7,000
2.6
-8.1
2.3
17.9
8.3
7.7
3,121
2,971
3,100
2,900
3,300
3,700
39.1
-4.8
4.3
-6.5
13.8
12.1
1,313
1,492
1,371
1,400
1,550
1,700
10.5
13.6
-8.1
2.1
10.7
9.7
1,079
1,088
1,096
1,325
1,500
1,650
-6.0
0.8
0.7
20.9
13.2
10.0
1,484
1,305
1,043
1,100
1,000
1,050
-7.5
-12.1
-20.1
5.5
-9.1
5.0
429
450
389
400
425
400
-28.0
4.9
-13.6
2.8
6.3
-5.9
69,884
70,133
68,879
74,175
81,575
86,550
6.9
0.4
-1.8
7.7
10.0
6.1
Source: Statistics Canada, Central 1 Credit Union. 2015 estimated, forecasts 2016 and 2017
Economic Analysis of Ontario
34
Central 1 Credit Union
Non-residential Building Permits ($ mil.), Regional Summary
Economic Region
2012
Ottawa
% ch.
Kingston-Pembroke
% ch.
Muskoka-Kawarthas
% ch.
Toronto
2013
2014
2015
2016
2017
1,284
1,179
1,180
1,074
1,115
1,190
24.5
-8.2
0.1
-9.0
3.8
6.7
299
238
495
270
280
300
-10.6
-20.5
108.3
-45.5
3.7
7.1
170
129
235
130
150
180
23.3
-24.0
81.6
-44.7
15.4
20.0
5,995
6,193
5,985
7,000
6,900
7,500
% ch.
0.2
3.3
-3.4
17.0
-1.4
8.7
987
982
1,308
1,200
1,300
1,550
% ch.
-29.6
-0.5
33.1
-8.2
8.3
19.2
1,491
1,264
889
960
1,000
1,200
100.7
-15.2
-29.7
8.0
4.2
20.0
474
479
420
490
500
550
% ch.
-55.5
1.1
-12.4
16.7
2.0
10.0
598
363
347
375
425
475
% ch.
45.6
-39.2
-4.6
8.1
13.3
11.8
262
263
350
315
310
335
% ch.
15.2
0.4
33.2
-10.0
-1.6
8.1
359
381
447
300
350
400
-16.4
6.2
17.3
-32.9
16.7
14.3
247
194
86
110
140
140
Kitchener-Waterloo-Barrie
Hamilton-Niagara Peninsula
% ch.
London
Windsor-Sarnia
Stratford-Bruce Peninsula
Northeast
% ch.
Northwest
% ch.
Ontario
% ch.
75.5
-21.8
-55.6
27.9
27.3
0.0
12,166
11,666
11,742
12,224
12,470
13,820
2.2
-4.1
0.7
4.1
2.0
10.8
Source: Statistics Canada, Central 1 Credit Union. 2015 estimated, forecasts 2016 and 2017
Economic Analysis of Ontario
35
Central 1 Credit Union
Population (000s), Regional Summary
Economic Region
Ottawa
% ch.
Kingston-Pembroke
% ch.
Muskoka-Kawarthas
% ch.
Toronto
% ch.
Kitchener-Waterloo-Barrie
% ch.
Hamilton-Niagara Peninsula
% ch.
London
% ch.
Windsor-Sarnia
% ch.
Stratford-Bruce Peninsula
% ch.
Northeast
% ch.
Northwest
% ch.
Ontario
% ch.
2012
2013
2014
2015
2016
2017
1,297.6
1,309.1
1,320.3
1,331.0
1,343.0
1,358.0
1.0
0.9
0.9
0.8
0.9
1.1
466.6
467.7
468.7
470.0
471.4
473.1
0.3
0.2
0.2
0.3
0.3
0.4
378.2
380.0
381.5
383.0
385.5
388.5
0.6
0.5
0.4
0.4
0.7
0.8
6,171.6
6,268.8
6,357.7
6,439.8
6,530.3
6,626.1
1.6
1.6
1.4
1.3
1.4
1.5
1,271.4
1,285.1
1,297.9
1,308.5
1,319.0
1,332.0
1.2
1.1
1.0
0.8
0.8
1.0
1,422.8
1,435.0
1,445.9
1,456.2
1,467.9
1,483.1
0.8
0.9
0.8
0.7
0.8
1.0
657.6
662.3
666.4
670.9
675.8
681.5
1.0
0.7
0.6
0.7
0.7
0.8
638.4
638.2
637.4
637.0
637.5
637.9
0.1
-0.0
-0.1
-0.1
0.1
0.1
299.8
300.3
300.5
300.7
301.2
301.7
-0.1
0.1
0.1
0.1
0.2
0.2
565.7
564.3
562.6
560.9
559.0
557.3
-0.2
-0.2
-0.3
-0.3
-0.3
-0.3
240.4
240.1
239.8
239.4
239.1
239.1
-0.1
-0.1
-0.1
-0.2
-0.1
0.0
13,410.0
13,550.9
13,678.8
13,797.4
13,929.7
14,078.3
1.1
1.1
0.9
0.9
1.0
1.1
Source: Statistics Canada, Central 1 Credit Union. Forecasts 2015 to 2017
Note: As of July 1, latest actual 2014.
Economic Analysis of Ontario
36
Central 1 Credit Union
Ontario Forecast Table
2012
2013
2014
2015
2016
2017
GDP at market prices
3.1
1.9
4.1
3.2
4.2
5.2
Real GDP, expenditure-based
1.3
1.3
2.7
2.5
2.6
3.0
1.5
2.0
2.5
2.8
3.1
2.9
Household consumption
Government expenditure
0.1
0.0
0.7
0.3
0.4
0.8
Government capital formation
-5.6
-7.7
1.4
1.3
2.2
3.8
Business capital formation
3.0
-7.1
1.4
3.4
3.5
4.3
Residential structures
4.7
-1.7
0.4
8.0
6.3
3.9
Machinery and equipment
-0.9
-22.2
6.9
-5.1
0.7
4.9
Non-residential structures
8.0
-5.6
1.6
6.3
1.1
5.5
Final domestic demand
1.1
-0.3
1.9
2.3
2.5
2.7
Exports
2.4
2.0
1.9
2.3
2.7
3.3
Imports
1.0
-1.0
1.1
1.4
1.2
2.3
Net exports, $2007 bil.
0.7
10.4
13.3
11.2
16.5
20.4
Employment
0.7
1.8
0.8
0.8
1.5
1.4
Unemployment rate (%)
7.9
7.6
7.3
6.9
6.6
6.3
Personal income
3.4
3.2
3.5
4.1
4.7
4.9
Disposable income
2.0
3.7
2.5
4.0
4.6
4.7
Net operating surplus: Corporations
3.0
-5.8
12.7
-1.8
4.4
10.7
CPI
1.4
1.1
2.3
1.2
1.9
2.0
Retail sales
1.6
2.3
5.8
3.8
5.5
5.8
Housing starts, 000s
76.7
61.1
59.2
67.6
74.6
77.2
Population growth, %
1.1
1.1
0.9
0.8
0.9
0.9
Key External Economic Forecasts
U.S. real GDP, % chg.
2.3
Canada real GDP, % chg.
European Union real GDP, % chg.
China real GDP, % chg.
Japan real GDP, % chg.
Canada 3-month t-bill, %
Canada GoC long-term bond, %
U.S.-Canada exchange rate, cents/dollar
1.5
2.4
2.4
2.6
2.7
1.9
2.0
2.4
1.0
1.8
2.2
-0.6
-0.4
1.4
1.7
1.9
1.8
7.7
7.7
7.3
6.8
6.5
6.3
1.7
1.6
-0.1
0.8
1.3
0.7
0.97
0.97
0.95
0.55
0.50
0.70
2.33
2.72
2.77
2.15
2.45
2.80
100.1
97.1
90.6
78.0
73.0
72.2
94
98
93
48
50
55
2.75
3.73
4.39
2.60
3.00
3.25
Crude oil WTI, US$ per barrel
Henry Hub, US$ mmbtu
Source: Statistics Canada, IMF, Bank of Canada, U.S. Federal Reserve, Central 1 Credit Union forecasts.
Note: Per cent change unless otherwise indicated.
Economic Analysis of Ontario
37