Durham Region will likely outpace Ontario moving forward, according to TD Bank Group Vice President and Deputy Chief Economist Derek Burleton.
Durham has been a prime beneficiary of the ‘race for space’ in the Greater Toronto Area (GTA), he said during a virtual address to business professionals and community leaders from across the GTA at the City of Oshawa’s Economic Outlook Event on April 21.
Oshawa Mayor Dan Carter noted new employment opportunities will continue to meet the needs of Oshawa residents as one of the fastest growing communities in Canada. With a 2.1 per cent population growth in 2020 and 2.3 per cent in 2021, Oshawa will continue to see further residential development in the Kedron and Columbus neighbourhoods.
Councillor Tito-Dante Marimpietri, Chair of the Development Services Committee, noted that economic forecasts by the Conference Board of Canada project an optimistic outlook for the city at 4.7 per cent GDP growth as well as 8.5 per cent growth in manufacturing output.
Despite the impact of the global pandemic, total building permits issued in 2021 were the second highest on record in Oshawa’s history totaling over $560 million in addition to 11 new building records. He pointed out that this investment momentum has continued into 2022, as Oshawa’s year-to-date construction records have already surpassed 2021 by $50 million, setting pace for another strong year.
Mayor Carter provided additional local highlights, including a landmark $2 billion commitment from GM Canada that includes a retooling of the Oshawa Assembly plant, creating 2,600 jobs and attracting a diversified workforce, with over 50 per cent of the assembly team made up of female workers. GM Canada’s recent investments also include a 55-acre autonomous vehicle test track and new stamping manufacturing facility, all of which position Oshawa to play a major role in a new competitive auto industry.
More sustainable growth
TD Deputy Chief Economist Burleton noted that the rapid economic growth we have seen nationally over the pandemic will cool, creating more sustainable growth long term. GDP growth of 3% is projected by the end of 2022, bolstered by high household savings rates and a strong commodities sector. Supply chain pressures and elevated commodity prices are expected to continue into 2022 with the Russia Ukraine conflict
Burleton went on to state that we should see a rebalancing of our economy as it transitions from demand in goods to services. It is estimated that $200 billion in savings exist within Canadian households, $40 billion of which will make its way into the economy. He also forecasted that service spending is expected to increase with easing Covid-19 restrictions. This would serve as a tailwind for the Canadian economy.
The Canadian job market remains robust and strong. With immigration revving up across the country, Burleton has an optimistic long-term outlook of labour supply. While Covid-19 severity lessens, it continues to have an impact on supply chains and inflation. Inflation should ease to 4-5 per cent by the end of 2022, which will continue to apply pressure to the Bank of Canada and monetary policy. While not at pre-pandemic levels, the federal government continues to spend in order to bolster economic growth. Housing price growth has slowed and will continue to, but at this point, a major correction is not being forecasted due to continued supply constraints.
This was the 18th annual Economic Outlook Breakfast presented by the City’s Economic Development Services Branch with TD Bank Group.