Ontario to Enjoy Stronger Growth, but Regional Impact will Vary, Central 1 Credit Union Forecasts

TORONTO, ONTARIO--(Marketwired - Jan. 22, 2015) - External factors are setting the stage for a better performing Ontario economy and many of its regional economies, says a new forecast by Central 1 Credit Union.

The improvement will be broadly based across industries and regions, though some manufacturers will experience negative fallout from the decline in exports to oil-producing provinces.

"Ontario's prospects are improving because of lower oil prices, the lower Canadian dollar and faster U.S. growth," says Steve Stinson, senior economist with Central 1, which is the trade association and financial facility for Ontario credit unions.

Key findings in the forecast include:

• Improving external conditions will support higher provincial growth
• Regional economies will be boosted in varying degrees
• Regional growth disparities will narrow
• Northern regions and rural areas will continue to lag

Regional economies in southwestern and central Ontario are well-positioned to benefit from the expected improvement in manufacturing, agriculture, and tourism, Stinson says.

Domestic economic activity, for example housing, will also firm in most regions and will be aided by higher population growth. Northern regions, which are heavily dependent on mining, face less optimistic prospects.

Central 1 forecasts the province's real Gross Domestic Product will grow by 2.7 per cent in each of the next two years, compared to 1.9 per cent in 2014 and 1.3 per cent in 2013.

Canada's economic growth will be negatively affected by the oil price collapse and, depending on where oil prices settle and on how long prices remain low, the impact on real GDP growth could be 0.5 per cent in 2015.

The housing market will hold up and post further gains under improving economic and population growth, coupled with low interest rates and pent-up demand in some regions.

Manufacturing-oriented economies outside of the Toronto and Kitchener-Waterloo-Barrie regions are beginning to see gains and are poised for faster growth. Southwestern regions and the Hamilton-Niagara region are favourably positioned and also have the added advantage of robust agricultural and, in some cases, tourism sectors.

Northern regions will continue to lag because of their large dependence on the mining sector, which faces weak prices and export prospects as long as slow growth persists in emerging markets such as China. The wood products sector, however, faces better prospects from rising U.S. housing starts.

Read the Ontario Regional Economic Outlooks

About Central 1

With offices in Vancouver, Mississauga and Toronto, Central 1 - which holds approximately $13 billion in on balance sheet assets - provides wholesale financial products, trust services, investment banking services, along with digital and payment services that power innovation in retail financial services for more than 300 credit unions and institutional clients from coast to coast.

In addition, Central 1 is the primary liquidity manager, payments provider and trade association for our member/owner credit unions in B.C. and Ontario. Our members represent a consumer-oriented, full-service retail financial system that collectively serves 3.3 million members and holds more than $97 billion in assets. For more information, visit www.central1.com.