/Economic report sees positive momentum amid growing disparity

Economic report sees positive momentum amid growing disparity

By Nick Bernard

The Haliburton Highlands Chamber of Commerce, along with the Ontario Chamber of Commerce (OCC), released the sixth annual Ontario Economic Report on Feb. 6, offering a view of the economic forecast for 2022.

According to a statement from the chamber, the 72-page OER provides regional and sector-specific data on business confidence, policy priorities, and economic indicators, which together provide a unique view on the hurdles ahead.

Inflating costs of raw materials and transportation at the producer level have affected consumer prices, which rose 3.5 per cent and are expected to rise another 3.5 per cent in 2022. Ontario’s year-over-year housing price growth was above 30 per cent in Dec. 2021.

In Muskoka and the Kawarthas – including Haliburton County – employment grew by 2.4 per cent after falling 2.5 per cent in 2019 and another 1.0 per cent in 2020. The chamber predicts a stronger uptick in 2022, with employment expected to rise by 3.5 per cent.

The region’s economic growth is owed to its concentration of businesses in construction, manufacturing, and tourism-related industries – all of which are anticipated to make strong recoveries, assuming Ontario continues to ease public health restrictions as planned.

From a provincial perspective, the report outlines business confidence, which increased from a record low in 2020, amid progress on vaccinations and reopening.

Last year, 2021, also saw positive employment growth, with the exception of Northern Ontario, though several regions still struggle to offset the major job losses seen during the first year of the pandemic.

Small businesses found themselves preoccupied with cost relief measures, such as business taxes and electricity rates. In contrast, larger businesses focused more on long-term infrastructure, and faced issues around regulations and workplace development for employees.

Most sectors – 62 per cent – faced labour shortages over the year, with those shortages expected to continue over the next year.

Overall, the report states that 29 per cent of Ontario businesses were confident in Ontario’s economic outlook, and 57 per cent were confident in the outlook of their organizations. More pessimism was observed in smaller businesses, those located in border regions, organizations led by women and people with disabilities, and businesses in the arts, entertainment, and agricultural sectors.

Ontario’s economic indicators began to see positive momentum in 2021 after hitting a record low in 2020. Real GDP rebounded by 4.2 per cent and is expected to grow another 4.1 per cent this year. Meanwhile, employment grew 4.9 per cent and is forecasted to see 4.2 per cent growth in 2022.

Forecasts for 2022 suggest employment will recover to pre-pandemic levels for all regions except Toronto, Hamilton-Niagara Peninsula, London, Windsor-Sarnia, and Northwestern Ontario, suggesting that disparities continue to plague the province’s economy.

The 2021 Ontario Economic Report is available to view on the OCC’s homepage at https://occ.ca/