Ontario economic snapshot for July 7, 2012

July 7, 2012

TORONTO, ON, Jul 7, 2012/ Troy Media/ – Full-time employment in Ontario increased by 35,100 persons (0.6 per cent) in June compared with May, according to the latest estimate from Statistics Canada. That lifted total employment in the province 0.3 per cent to 6.78 million persons.

The unemployment rate was little changed at 7.7 per cent of the labour force. All numbers are seasonally-adjusted, unless otherwise noted. The labour force of younger workers aged 15 to 24 increased by an estimated 17,300 persons (1.6 per cent) in June as students returned to the labour market. Fulltime employment among this age group increased, as did their unemployment rate.

By industry, employment in Ontario increased in business and building support services, educational services and accommodation/food services. Job gains in these industries were largely offset by declines in information services and agriculture.

Employment in metro Toronto jumped by an estimated 34,400 persons (1.2 per cent) in June. Regionally, job growth over the last three months has been led by metro Toronto, Ottawa, London and Northeast Ontario. Growth in these regions was largely offset by lower employment in Hamilton-Niagara, Kitchener- Waterloo, Muskoka-Kawarthas and Kingston-Pembroke.

We forecast modest to moderate economic growth over the medium term, leading to a gradual decline in Ontario’s unemployment rate. With forecast employment growth of 1.6 per cent in 2012 and labour force growth at 1.3 per cent, the unemployment rate slides to 7.5 per cent from 7.8 per cent in 2011.

Ontario’s unemployment rate is forecast to fall below 7 per cent in 2013 and to decline each year to 6.1 per cent in 2015. Labour force growth picks up but does not keep pace with 2.0 per cent average annual employment growth. Average hourly wage increases gradually gather momentum in response to improving market conditions, reaching 3.0 per cent in 2015.

Construction

Building permits issued in Ontario during May inched up 3 per cent from April to $2.3 billion, seasonally adjusted. There was little month-over-month change in regional or activity sectors.

Building intentions in Ontario are moderating from recent near-record highs as multi-family residential projects in metro Toronto and public sector non-residential projects in Ontario moderate.

In the first five months of 2012, building permits issued in Ontario totaled $12.1 billion, up 6 per cent from the same period last year. Residential permits totaled $7.4 billion year-to-date, up 15 per cent year-over-year. Non-residential permits totaled $4.7 billion year-to-date, down 7 per cent year-over-year.

We forecast residential building permits issued in Ontario will decline 4 per cent this year following a 4 per cent increase last year.

Robust growth in housing starts and renovation over the past few years is forecast to slow this year. Private sector non-residential building permits are forecast to rise 28 per cent following a 16 per cent decline in 2011. Public sector, non-residential building permits are forecast to drop 19 per cent this year following a 10 per cent increase last year.

| Central 1 Credit Union

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