Central 1’s latest report provides a deep dive into current regional economic trends; innovative areas sheltered from economic slowdown
ONTARIO, CANADA, June 6, 2019 – Ontario’s tech hubs and diverse economic regions will withstand the economic slowdown sweeping the rest of the province through to 2020, according to the latest Central 1 Credit Union (Central 1) report.
Central 1’s Regional Economist, Edgard Navarrete, said areas with innovative sectors have blossomed while areas with high exposure to trade have been adversely affected.
“Regions such as Ottawa, Kitchener-Waterloo-Barrie and Muskoka-Kawarthas have experienced economic and employment growth due to strength in new and exciting sectors, and they will continue to grow in 2019,” said Navarrete.
Ottawa’s high-tech sector will expand at a fast pace supported by employment growth of 1.1 per cent; Kitchener-Waterloo-Barrie’s booming tech-sector will be supported by robust employment growth of 2.4 per cent; and, Muskoka-Kawarthas’ service-based economy will be boosted with manufacturing in the aerospace industry, and by international companies such as Rolls-Royce and Siemens—supported by employment growth of 1.2 per cent.
Kingston-Pembroke, while not a growing tech hub, has diversified its economy away from auto manufacturing and will also be insulated from the economic headwinds.
The remaining seven economic regions will suffer the flow-on effects of international trade and geopolitical concerns.
“Regions dependent on resources or with close links to trade will continue to be affected by the ongoing tariff war between the U.S. and China,” said Navarrete.
Economic uncertainty related to trade has dampened business and consumer confidence and consequently, consumer spending.
Consumers have also halted home buying activity as evidenced by sharp sales declines and eroding prices.
Navarrete said that the federal mortgage B-20 stress tests have created notable declines in residential investments across most regions, especially those close to the Greater Toronto Area. Job growth in construction, finance, insurance, real estate and related industries has stalled as a result.
Despite the current slowdown, the report predicts a recession-free future with growth in the economy, supported by population growth and consumer demand heading into 2020.
Highlights from the report:
- The economy in most regions in Ontario are expected to slow in 2019 with few exceptions before gradually recovering in 2020
- Mortgage credit rules will continue to put downward pressure on homeownership demand in several large markets particularly those in the GTA
- Population growth will remain supportive of future economic growth mainly through robust growth to immigration
- Trade and geopolitical concerns remain significant risks to the Ontario economy
- Business investment will decline or remain muted in most areas as businesses try to wait out the trade and geopolitical issues
Read the full report: Ontario Regional Economic Outlook 2019 – 2020