January 15, 2014: The Greater Toronto Economic Region can expect moderate growth through 2014, according to a new economic outlook released by the Greater Oshawa Chamber of Commerce in cooperation with the Ontario Chamber of Commerce and the Credit Unions of Ontario. Click here to download the report [PDF].
Economic growth was moderate in the region in 2013, despite higher than average employment growth and rising business investment. Growth is held back by slowing residential construction and government spending and this year’s large employment gain does not automatically translate into GDP growth.
The outlook is for this moderate growth phase to extend well into 2014 and possibly into 2015, before transitioning to faster growth in 2015 led by exports and domestic demand. However, government investment and spending will continue to drag.
“Major projects in the Toronto Region contribute materially to investment spending and employment. The $1.1 billion first phase of the Highway 407 extension in west Durham runs through 2015. OPG’s Darlington nuclear power plant renovation in Clarington will cost almost $10 billion over 15 years”, says Bob Malcolmson, CEO & General Manager of the GOCC.
Toronto’s housing market continues to hum along. Over 44,000 building permits are projected to be granted in 2014–more than half of the total number of permits being issued in the province. Housing sales and prices are forecast to increase through 2015, driven by the region’s rising population, employment, and personal income. This increase will be dampened only slightly by modest increases in mortgage rates.
Housing sales will rise by over 7 percent in the next two years while prices continue to set record highs. The average price of a Toronto house will rise by 9 percent over the next two years, hitting $578,000 in 2015, up from $530,100 in 2013.
A housing crash is highly unlikely unless the economy dips back into recession. And though affordability for low-equity buyers will worsen, it is not sufficient to cause a crash.
Job growth in the region was strong in 2013, growing by just short of 4 percent, by far the highest employment growth rate in the province. Employment growth in Toronto will slow in 2014 and 2015; though will remain above the provincial average as Toronto adds another 130,000 jobs in the next two years. Most of the job gains will be in the professional-scientific-managerial services, finance-insurance-real estate services, retail-wholesale trade, construction and a variety of miscellaneous service industries.
“The Greater Oshawa Chamber of Commerce was pleased to participate with the Credit Unions of Ontario and the Ontario Chamber of Commerce in the release of this report along with over thirty other Chambers of Commerce from across Ontario. The GOCC was one of six Chambers of Commerce and Boards of Trade in the GTA including Newmarket, and Burlington, Mississauga and Toronto Board of Trade and the only Chamber in Durham Region,” Malcolmson adds.
The Toronto Economic Region covers Durham, York, Peel and Halton Regional Municipalities as well as the City of Toronto and is home to over six million residents. The region’s real GDP is estimated at $288 billion in 2012, accounting for half and one-fifth of Ontario and Canada’s economic output respectively. The economy is highly concentrated in finance and insurance, professional and business services, information and communications, and manufacturing.
Click here to download the full economic forecast {PDF}
Key Facts and Highlights:
? Toronto’s housing market continues to hum along. Over 44,000 building permits are projected to be granted in 2014, more than half of the total number of permits being issued in the province.
? Toronto’s population growth leads the province–and is projected to do so for the foreseeable future. Population growth is being driven in part by net migration to the region. Of the nearly 87,000 migrants expected to move to/within Ontario in 2014, nearly 60,000 will move to Toronto.
? The average price of a Toronto house will rise by 9 percent over the next two years, hitting $578,000 in 2015, up from $530,100 in 2013.
? Despite high housing costs, Toronto’s housing sales are projected to increase over the coming years. Nearly half of all housing sales in the province will come from the region.
? Toronto’s unemployment rate is projected to fall from 8.6 percent in 2012 to 7.5 percent in 2015, on par with the long-term historical average for the region.
