By Dave Flaherty/The Oshawa Express
A recently released study from the Conference Board of Canada includes some very good news, and a bit of not so good news for Oshawa’s economy.
The board’s report compares the economic outlook of 16 cities across the nation.
For this study, Oshawa includes the Town of Whitby and the Municipality of Clarington.
The report predicts Oshawa’s real gross domestic product (GDP) will grow by 2.6 per cent in 2018.
While this figure is down from 3.2 per cent in 2017, it is still the highest among the compared municipalities.
The report forsees Oshawa’s real GDP will grow by 2.3 per cent in 2019, again topping the list.
The next two years will represent a cool off for the city, which exceeded three per cent in GDP growth between 2014 and 2017.
During that same time period, the unemployment rate decreased from 7.2 per cent to 5.5 per cent, while household income jumped an annual average of 4.1 per cent.
Looking at Oshawa’s employment by sector, retail trade is at the top of the list, accounting for 22.5 per cent of jobs, followed by construction (19.5 per cent), public schools (11.7 per cent), and food and beverage services (10.8 per cent).
After a 1.7 per cent decline in 2017, it is believed more than 12,000 new jobs will be created throughout 2018 to 2019.
Looking further down the line, the board predicts an average GDP growth of 2.3 per cent between 2019 and 2022.
Based on these estimates, Oshawa would accomplish average yearly growth of 2.7 per cent between 2013 and 2022. This the highest amount between the 16 compared municipalities.
The Conference Board of Canada warns that proposed U.S. tariffs could significantly mitigate this positive outlook for Oshawa’s economy.
As part of a current trade quarrel with Canada, U.S. President Donald Trump has threatened 25 per cent tariffs on imported automobiles.
“Darker days may lie ahead…such a move would disrupt the highly integrated North American supply chain, push auto prices up, and result in a drop in both sales and profits,” the report’s authors write.
Manufacturing employment dropped by 8.3 per cent in 2017, resulting in 1,540 job losses.
Jobs have declined 17 per cent since 2003, and the manufacturing workforce has been cut in half since the 1980s.
It was the only industry noted in the report to have regressed in 2018.
Manufacturing growth contracted by 3.4 per cent, the largest dip since the recession of 2008 to 2009.
The decline is expected to continue at a 1.6 per cent rate in 2018, before rebounding by 1.3 per cent in 2019.
Construction was the breakout sector in the city in 2017, as output expanded by 8.6 per cent, the largest gain in 15 years.
This momentum is envisioned to slow down a bit over the next few years, with gains of 4.9 and 2.3 per cent respectively.
The industry was driven by the new housing market, with housing starts up by 13.8 per cent. In Oshawa alone in 2017, there were 2,835 housing starts.
But again, things will slow down over the next two years, with housing starts of 2,339 and 2,420 expected in 2018 and 2019.
According to the board’s report, a number of significant non-residential projects are expected to ease the effect of a slower housing market.
These include a $100 million investment by Bell Canada to bring its all-fibre optic network to Oshawa, the multi-billion dollar refurbishment of Darlington Nuclear Generating Station and construction on the park-and-ride lots for the future Ritson Road and Courtice Road Go Stations.
Moderate growth of 3.5 per cent is expected to continue in the finance, real estate and insurance industries.
The wholesale trade sector had a spectacular year in 2017, with a growth of 13.2 per cent.
This year and next are forecasted to still see improvement but at a much slower rate.
One grey cloud in the overall sunny forecast was the manufacturing industry.
The Conference Board of Canada is an independent, not-for-profit research organization.
Some of the other cities included in the report included Thunder Bay, Sudbury, Kitchener-Cambridge-Waterloo, Saint John, NB, and Sherbrooke, Que.