By: Timmins Today
After a year of contracting employment, Northeastern Ontario will slowly begin to find its economic footing in 2016, though progress will lag behind much of the rest of the province, according to a new report released today by the Ontario Chamber of Commerce and the Credit Unions of Ontario.
Released with support from the Timmins Chamber of Commerce, Ontario Economic Update 2016 highlights how some commodity markets are beginning to find their footing, which is a positive sign for the Northeast.
The Northeast Economic Region covers the districts of Cochrane, Timiskaming, Greater Sudbury, Nipissing, Parry Sound, Manitoulin, and Algoma, and is home to over 560,000 residents.
In particular, data shows that Ontario’s forest sector is experiencing gains, with overall forest products shipments climbing 12 percent 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, including lumber.
“It’s heartening to note some positive movement in the forestry sector, which remains vital for Northeastern Ontario,” said Kurt Bigeau, president of the Timmins Chamber of Commerce.
“That said, the report indicates that the challenges being experienced by global mining markets will continue to put some strain on the region’s economy. This just further reinforces the need for governments to act now to protect the competitiveness of our resource sectors to ensure we remain a leading global centre for investment.”
Despite gains, any contribution from primary production will not kick in until 2017.
In the interim, job growth will be very modest, with employment set to grow at a 0.4 yearly rate in 2016 and 2017.
The industries contributing most to near-term economic growth are retail and wholesale trade; health and social services; and other services.
After jumping to a projected 7.9 percent 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 regional unemployment rate will fall to 7.5 percent by 2017.
“Ontario and its regional economies will grow at a moderate but faster pace through 2017 aided by favourable external factors such as the low dollar and interest rates and an improving U.S. economy,” said Helmut Pastrick, chief economist at Central 1 Credit Union. “Most regions will participate and contribute to Ontario’s improved economic prospects though differences exist among regions. Resource-based regions will be weighed down by poor metal markets.”
According to the report, the proposed Energy East Pipeline, which cuts across Northeastern Ontario, will also act as an economic driver, and will support more than $700 million in construction activity through to its expected completion in 2018.
While the region experienced strong housing sales in 2015 (7.8 percent residential sales growth), this activity belies underlying weakness in Timmins, Sudbury, Sault Ste. Marie, and North Bay, where average sales prices have slipped year-to-date. Average residential housing prices slipped in 2015, to $212,500, a decline of 1.7 percent.
According to the province-wide data, most other areas of Ontario will enjoy improving economic conditions in the coming year.
Growth will be driven in part by an uptick in exports, the result of a stronger U.S. economy and a low Canadian dollar.
Government fiscal policy will also be a key driver, as federal and provincial infrastructure commitments will stimulate growth across a variety of sectors.
“Ontario businesses are helping Ontario emerge stronger from the downturn,” said Allan O’Dette, president and CEO of Ontario Chamber of Commerce. “However, our economy still faces significant challenges. In order to generate sustained economic growth, government must invest in infrastructure, close the skills gap, and ensure that input costs do not stifle investment or job creation.”
By: Timmins Today