Published on May 2, 2022 at 10:02 am
The rapid economic growth that has occurred nationwide during the pandemic will slow, creating more sustainable long-term growth, predicted TD Bank Group Vice President and Deputy Chief Economist Derek Burleton, who spoke virtually to business professionals and community leaders from across the GTA at the City of Oshawa’s Economic Outlook Event on April 21.
GDP growth of 3% is forecast by the end of the year, supported by high household savings rates and a strong commodities sector, but Burleton also expects pressures on the supply chain and high commodity prices continue into 2022 due to the war in Ukraine.
Burleton said Canada should see a rebalancing of the economy as it shifts from demand for goods to services. It is estimated that $200 billion in savings exist within Canadian households, of which $40 billion will end up in the economy. He also forecast that spending on services is expected to rise as COVID-19 restrictions ease. This would act as a tailwind for the Canadian economy.
The Canadian labor market remains strong and strong, he added. With immigration accelerating across the country, he has an optimistic long-term view of labor supply. Although the severity of COVID-19 is diminishing, he said, it continues to impact supply chains and inflation.
Burleton expects inflation to decline to 4-5% by the end of 2022, which will continue to put pressure on the Bank of Canada and monetary policy. While not at pre-pandemic levels, he continued, Ottawa will continue to spend to support economic growth. House price growth has slowed and will continue to slow, but at this point no major correction is expected due to ongoing supply constraints.
Locally, Burleton said, Durham Region has been a major beneficiary of the “race to space” in the GTA and will likely overtake Ontario in the future.
“We are encouraged by Derek Burleton’s remarks regarding Oshawa’s local economic recovery,” said Oshawa Mayor Dan Carter. “GTA businesses and investors are showing confidence in our economic future and prospects for continued growth. Oshawa offers tremendous value through proximity to global markets, world-class research facilities and a talent pool of more than 25,000 post-secondary students. Big cities do hard things, solve big problems, and create new opportunities for success.
Carter provided other local highlights, including a historic $2 billion commitment from GM Canada that includes retooling the Oshawa assembly plant, creating 2,600 jobs and attracting a diverse workforce, with more than half of the assembly team made up of female workers. GM Canada’s recent investments also include a 55-acre autonomous vehicle test track and a new stamping manufacturing facility, which it says positions Oshawa to play a major role in a competitive new auto industry.
New employment opportunities will continue to meet the needs of residents of Oshawa as one of the fastest growing communities in Canada, he added. With population growth of 2.1% in 2020 and 2.3% in 2021, Oshawa will continue to see new residential development in the Kedron and Columbus neighborhoods.
Councilor Tito-Dante Marimpietri, Chair of the Developmental Services Committee, closed the event by also speaking about the strong economic growth in the City of Oshawa, anchored by thousands of new job opportunities and more businesses. choosing the city to invest and expand.
“Mr. Burleton’s positive economic outlook for Oshawa is a testament to the results of our strategic vision and focused work at the City,” he said. “With a focus on building a vibrant and sustainable for all, we welcome new business interests with enthusiasm and a cutting-edge commitment to providing the responsive customer service needed to attract investment.As the community of choice for investors and job-creating businesses in the Greater Toronto, Oshawa’s future is indeed bright.
Marimpietri noted that the Conference Board of Canada’s economic forecast predicts an optimistic outlook for the city with GDP growth of 4.7% as well as 8.5% growth in the manufacturing sector. Despite the impact of the global pandemic, the total number of building permits issued in 2021 was the second highest ever in Oshawa’s history, totaling more than $560 million, in addition to 11 new construction records . He pointed out that this investment momentum has continued into 2022, as Oshawa’s year-to-date construction records have already topped 2021 by $50 million, setting the stage for another strong year.
This was the 18th annual Economic Outlook Breakfast hosted by the City’s Economic Development Services Branch with TD Bank Group.
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