Risks Overshadow Positive Momentum: Ontario’s Two-Year Outlook

The Conference Board of Canada, 15 pages, December 16, 2021
Issue Briefing
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This quarterly economic forecast for the province of Ontario examines the economic outlook for the province, including gross domestic product (GDP), output by industry and labour market conditions.

Document Highlights

  • Ontario’s real GDP will expand by 4.5 per cent this year and by 4.2 per cent in 2022 before moderating to a 1.4 per cent gain in 2023.
  • Employment in the province bounced back nicely in the third quarter of this year. With plenty of room left to recover in high-contact services, strong job growth is on the horizon.
  • Housing markets in Ontario will remain in excellent shape despite signs of cooling over the past few months.
  • The economy will be led by household spending gains due to pent-up demand and record high savings. But scorching hot inflation and eroding savings will put a wrench into real spending.
  • The semiconductor chip shortage will remain an issue until at least the second half of 2022. Many of the province’s automakers will continue to operate well below their desired production levels.

Table of Contents

Key Findings
Ontario Snapshot
Positive Momentum in Employment Here for a While
Job Vacancies Pose a Risk to Labour Market, but Minimum Wage Hike May Help
Consumers Are Opening Their Wallets
Inflationary Pressures Could Suck the Air Out
Investment Driven by Continued Strength in Housing
Fiscal Outlook: Plenty of Red Ink
Trade Recovery Hinges on Semi-Conductor Shortage

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