February 2016 Economic Development Update

MEMO / NOTE DE SERVICE
Information previously distributed / Information distribué auparavant
TO: Chair and Members of Finance and Economic Development Committee
DESTINATAIRE : Président et membres du Comité des finances et du développement
économique
FROM: Saad Bashir, Director
Economic Development and Innovation
Department
Contact:
Danyelle Bélanger, Research Assistant
Economic Development and Innovation
Department
613-580-2424 extension 24248
[email protected]
EXPÉDITEUR: Saad Bashir, Directeur
Service de l’innovation et du
développement économique
Personne ressource :
Danyelle Bélanger, Adjointe, recherche
Service de l’innovation et du
développement économique
613-580-2424 poste 24248
[email protected]
DATE: March 1, 2016
1 mars 2016
FILE NUMBER: ACS2016-CMR-OCM-0008
SUBJECT: ECONOMIC DEVELOPMENT UPDATE – FEBRUARY 2016
OBJET : LE POINT SUR LE DÉVELOPPEMENT ÉCONOMIQUE – FÉVRIER 2016
PURPOSE
The purpose of the Economic Development Update is to provide members of Finance
and Economic Development Committee with the most up-to-date and relevant
information on Ottawa’s economy and related markets.
BACKGROUND
The City’s Economic Development and Innovation (EDI) Department analyzes a series
of publicly available key economic, financial, and business indicators for Ottawa. Every
month, the Economic Development Update examines trends in Ottawa’s labour market
(employment and unemployment), consumer prices, housing starts, home sales, and
construction.
Data reported in the February 2016 Economic Development Update has been adapted
from the following sources:
1. Statistics Canada’s Consumer Price Index results for the Ontario-portion of the
Ottawa-Gatineau CMA for December 2015;
2. Statistics Canada’s Labour Force Survey results for the Ontario-portion of the
Ottawa-Gatineau Census Metropolitan Area (CMA) for December 2015;
3. Canada Mortgage and Housing Corporation (CMHC) “Starts and Completions
Survey” and “Market Absorption Survey” results for the Ontario-portion of the
Ottawa-Gatineau CMA for December 2015;
4. Canadian Real Estate Association (CREA) results for the Ontario-portion of the
Ottawa-Gatineau CMA for December 2015; and
5. Statistics Canada’s Building Permits Survey results for the Ontario-portion of the
Ottawa-Gatineau CMA for November 2015.
DISCUSSION
Consumer prices in Ottawa rose 1.3 per cent in the 12 months to December 2015,
marking a thirteenth consecutive month in which the local rate of price inflation sat
below the Bank of Canada’s target of 2 per cent. As is historically the case, the average
price change reported in Ottawa for the period is slightly below the national and
provincial level (1.6 per cent and 1.7 per cent, respectively).
In terms of economic growth, the Bank of Canada is calling for a modest increase in
national gross domestic product in 2016 (+1.4 per cent). At the local level, the Ontario
Chamber of Commerce predicts that the Liberal government’s campaign pledge to
increase public spending and incur a modest deficit will help spur economic activity in
Ottawa in 2016 and 2017.
The Ottawa labour market added 1,000 jobs in the month of December, while the
unemployment rate held steady at 6.3 per cent for a second consecutive month. On an
annualized basis, the local labour market shed 2,700 jobs. Losses in public
administration (-7,500 jobs) and professional, scientific and technical services (-5,600
jobs) were offset by solid gains in the construction sector (+12,200 jobs). According to
the Ontario Chamber of Commerce, strength in the construction and high-tech sectors,
combined with increased government spending will help bolster employment growth in
Ottawa in 2016 and beyond.
The number of housing starts in 2015 totalled 4,972 units, well behind the 5,762 units
recorded in 2014 (a decline of 13.7 per cent). On the resale market, Ottawa real estate
agents sold 14,691 residential properties over the same period, which is an increase of
5.4 per cent from 2014.
According to Statistics Canada, Ottawa issued building permits totalling $199.2 million
in November 2015: $125.4 million in residential permits and $73.8 million in nonresidential permits. In the 11 months to November, local builders took out building
permits valued at $2.0 billion, which is 22 per cent less than the value of permits issued
over the same period in 2014. Despite the year-to-date trend, the Conference Board of
Canada expects the construction industry to grow by 3 per cent in 2016, well ahead of
the 1.6 per cent growth it predicts for the economy as a whole.
CONCLUSION
Economic Development and Innovation staff will continue to monitor these and other
trends related to the Ottawa economy and related markets.
Saad Bashir
Director, Economic Development and Innovation
CC: Kent Kirkpatrick, City Manager
SUPPORTING DOCUMENTATION
Document 1 – Economic Development Update for the City of Ottawa, February 2016
Document 2 – Le point sur le développement économique pour la Ville d’Ottawa, février
2016