Ottawa, December 8, 2016 – Ontario’s economy is expected to expand by more than 3 per cent this year and tie British Columbia for first place among the provinces in 2017, with real GDP growth of 2.4 per cent, according to The Conference Board of Canada’s Provincial Outlook: Autumn 2016.
“Ontario’s economy is not immune to the difficulties hitting the Canadian economy, but nevertheless, has been a pillar of growth,” said Marie-Christine Bernard, Associate Director, Provincial Forecasting. "However, with a number of industries operating at or near capacity, business investment is expected to improve over the next few years in Ontario.”
- The province’s real GDP is expected to increase by over 3 per cent this year and 2.4 per cent in 2017.
- With wage and salary increases of 2.8 per cent forecast over the next two years, consumer spending will help fuel growth in the province.
- With the exception of Newfoundland and Labrador, all provinces will see their economy expand next year.
Ontario consumers will greatly contribute to the province’s economic growth over the next two years. With employment forecast to outpace the national average and wage and salary increases of 2.8 per cent expected over the next two years, household spending will add $21 billion to Ontario’s GDP in 2016 and 2017.
With the Canadian dollar forecast to remain weak and given improving economic prospects for the U.S. economy – Ontario’s major export market – international exports are also expected to be a critical contributor to Ontario’s economy. Stability in the automotive sector, including General Motors’ new product mandate at its Oshawa plant, will help international trade remain strong through the medium term.
Rising home prices in Toronto has driven strong residential investment at the provincial level for three consecutive years. A decline in housing starts and softer residential investment are expected next year as tighter mortgage insurance rules and rising borrowing costs cool demand. But there is upside risk that the housing market continues to perform well as demand and prices continue to increase at a solid pace.
Meanwhile, a handful of large commercial development projects in downtown Toronto will help improve non-residential business investment. Investment in machinery and equipment should also improve next year as capacity constraints in a number of sectors have been felt.
The Provincial Outlook: Autumn 2016 is available via the Conference Board’s e-Library.