Central 1 Credit Union

Central 1 Credit Union

November 21, 2011 05:00 ET

Economic Growth Will Slow Across Ontario in 2012, Pick Up in 2013, Central 1 Chief Economist Forecasts: Toronto Region Will Lead, Followed by Kitchener-Waterloo-Barrie and London

TORONTO, ONTARIO--(Marketwire - Nov. 21, 2011) - The expected global economic slowdown will hit all regions of Ontario next year and will hinder economic growth in the province, according to the Economic Analysis of Ontario, released today by Central 1 Credit Union.

"Toronto will lead the province in most categories, along with Kitchener-Waterloo-Barrie and London, but even their pace will be slow," says Helmut Pastrick, Central 1's chief economist. "The regions that will lag through to 2013 are Kingston-Pembroke, Stratford-Bruce and the Northeast."

Pastrick said the Northeast won't grow faster until the U.S. economy picks up, while Kingston-Pembroke will be slowed by its dependence on government spending. The Stratford-Bruce region will depend on construction and utility projects for growth. Only in the three faster-growing regions has employment surpassed pre-recession levels, and in the other regions that won't change through 2013.

The regions in the middle performance group are Ottawa, Muskoka-Kawarthas, London, Windsor-Essex and the Northwest. Each has unique characteristics tied to their economies that will determine employment and growth opportunities. The Central 1 report examines each region in detail.

Toronto will lead the province in housing sales, construction and price gains in 2013, but prices in all regions will reach record highs, Pastrick forecasts.

The report says that overall Ontario's economy will grow by 2.1 per cent in 2011, 1.8 per cent in 2012 and 2.6 per cent in 2013, but there is a risk that the European debt situation could undercut these predictions.

Highlights of the report:

  • Public sector belt tightening means Ottawa will experience tepid job growth and weak investment.

  • Since the 2008 recession, the Kingston-Pembroke region has underperformed the rest of the province. This is unlikely to change over the next two years.

  • Unemployment will remain high in the Muskoka-Kawarthas region due to continued weakness in tourism and the recreational sector.

  • In Toronto, job growth will be 1.7 per cent in 2011, 1.4 per cent in 2012 and 1.8 per cent in 2013. The unemployment rate will slide to 8.2 per cent in 2012 and 8.1 per cent in 2013.

  • Employment in the Kitchener-Waterloo-Barrie region will rise 3.9 per cent this year, 2.5 per cent in 2012 and 3.1 per cent in 2013, driving the regional unemployment rate down to 6.1 per cent in 2013.

  • Economic conditions in Hamilton-Niagara Peninsula have remained steady over the past year. Regional employment is forecast to rise 2 per cent this year, slowing to 1.6 per cent in 2012 and 1.4 per cent in 2013.

  • Employment has declined in the London region since 2007, but it is expected to eke out a 0.2 per cent gain this year, 0.6 per cent in 2012 and 1 per cent in 2013.

  • The population in Windsor-Sarnia has been declining since 2007, but it is expected to level off in 2012 and inch up in 2013 as the economy rebounds.

  • Stratford-Bruce is forecast to enjoy strong job growth of 4.4 per cent in 2011, report a decline of 2 per cent in 2012 and grow by 1.9 per cent in 2013.

  • Investment in mines and power plants is expected to keep employment growing in the Northeast region.

  • Population and employment have been declining in the Northwest region, but the population is expected to stabilize and the unemployment rate will decline to 6.2 per cent in 2012 and 5.8 per cent in 2013.

"Our detailed analysis shows the wide variations across the province and illustrates how difficult it will be for the province to spur widespread growth, while at the same time reducing its deficit," Pastrick said.

The full report, Economic Analysis of Ontario, is available at the following link: http://www.central1.com/publications/economics/pdf/ea/ea%202011_ont03.pdf.

Central 1

Central 1 is the central financial facility and trade association for the B.C. and Ontario credit union systems. Central 1 represents a consumer-oriented, full-service retail financial system that serves 2.9 million members. Central 1 holds some $15 billion in assets and employs more than 550. It is owned primarily by its member credit unions, 45 in B.C. and 113 in Ontario.

With offices in Vancouver, Mississauga, and Toronto, Central 1 provides a wide range of services such as liquidity management, direct banking, and flexible payment service solutions. For more information, visit www.central1.com.

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