OTTAWA, ONTARIO--(Marketwired - Jan. 30, 2014) - The next three years will bring 16,000 new jobs to Ottawa, according to a new report released today by BMO Economics.
The report on the Canadian capital and primary economic hub of Eastern Ontario is the latest in a series of economic, housing and business overviews for various cities and regions across Canada that will be published by BMO throughout this year.
"Ottawa, traditionally an area of stability within Ontario's economy, is also faced with challenges stemming from government spending restraint," said Robert Kavcic, Senior Economist, BMO Capital Markets. "While, this restraint has posed a near-term headwind for Ottawa's economy, improving government finances should support growth in the years ahead."
Mr. Kavcic noted that fiscal restraint is weighing on the Ottawa economy as the Federal government aims to balance its budget. "For Ottawa, this means that growth will remain stagnant in the public sector, which accounts for nearly a third of the city's economic activity. The good news is that fiscal restraint is largely a short-term issue. With the fiscal plan firmly on track and the long-run benefit of sound finances, combined with the U.S. recovery benefiting the manufacturing sector, the national capital's outlook is positive."
Mr. Kavcic also said that information and communications technology, while not carrying the same economic punch as it did in the 1990s, will see some growth with the announcement of Cisco Systems bringing 1,700 jobs to Ontario; at least some of those jobs are expected to be located in Kanata.
"Ottawa remains a key centre for a number of businesses, over and above the public sector," said Sandra Henderson, Senior Vice President of BMO Bank of Monteal's new Eastern Ontario Division, headquartered in Ottawa. "Let's create these 16,000 jobs together. BMO is committed to Ottawa businesses getting their share of the $10 billion in credit we have made available, giving them access to the capital they need to grow and build on the momentum that is taking hold in this city.
"Ottawa is a priority for BMO. We are increasing our investment and bolstering our senior leadership team locally in order to help our customers take advantage of the growth opportunities this region has to offer over the next few years and beyond," noted Ms. Henderson.
The report, released today, revealed:
- The unemployment rate was above 7 per cent, before falling in recent months.
- The jobless rate in December, at 5.9 per cent, is still low by provincial standards, but above readings as low as 4.9 per cent earlier in the recovery when stimulus spending was at its peak.
- Fortunately, the lull in employment is expected to be relatively brief, and Ottawa's labour market should be able to add about 16,000 jobs through 2016, holding the jobless rate below 6 per cent, and staying near the low end of Canada's major cities.
- Existing home sales were down 3.1 per cent y/y in the first eleven months of 2013, back to levels consistent with the 10-year average.
- Average prices have levelled off, up on fractionally since mid-2011 after a strong post-recession rebound. In fact, the resale market has tilted in favour of buyers over the past year, with the sales-to-new listings ratio sinking to near the lowest level since the recession and the late-1990s.
- Affordability in the city is favourable, with the average home price sitting at roughly 3.3x median family income, well below Canada's other major cities.
- Homebuilding continues at a steady pace in Ottawa, with housing starts averaging 6,500 units in 2013-activity perked back up earlier in the year after hitting depressed levels in late-2012.
- Despite softer conditions in the resale market, there are currently nearly 7,000 housing units under construction in the city, the highest level in almost 40 years.
- Non-residential construction and infrastructure investment remains healthy-real non-residential building activity was up 21 per cent y/y through the first three quarters of 2013.
- Among projects currently underway is the massive $2.1 billion build-out of the light rail transit system, expected to run through 2018. This is the city's largest infrastructure project since the Rideau Canal, and will span 13 stations over 12.5 km, including a 2.5 km stretch underground through downtown.
The full report can be downloaded at www.bmocm.com/economics.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $537 billion as at October 31, 2013, and more than 45,000 employees, BMO Financial Group provides a broad range of personal and commercial banking, wealth management and investment banking products and solutions.