Moderate national growth predicted but economic forecast for Oshawa is strong, says TD Economist

Rapid economic growth that has happened nationally over the pandemic will cool, creating more sustainable growth long term, predicted TD Bank Group Vice President and Deputy Chief Economist Derek Burleton, who virtually addressed business professionals and community leaders from across the GTA at the City of Oshawa’s Economic Outlook Event on April 21.

GDP growth of three per cent is projected by the end of the year, bolstered by high household savings rates and a strong commodities sector, but Burleton also expects supply chain pressures and elevated commodity prices to continue into 2022 because of the war in Ukraine.

Burleton said that Canada should see a rebalancing of the economy as it transitions from demand in goods to services. It is estimated that $200 billion in savings exist within Canadian households, $40 billion of which will make its way into the economy. He also forecasted that service spending is expected to increase with easing COVID-19 restrictions. This would serve as a tailwind for the Canadian economy.

The Canadian job market remains robust and strong, he added. With immigration revving up across the country, he has an optimistic long-term outlook of labour supply. While COVID-19 severity lessens, he said, it continues to have an impact on supply chains and inflation.

Burleton expects inflation to ease to four to five per cent by the end of 2022, which will continue to apply pressure to the Bank of Canada and monetary policy. While not at pre-pandemic levels, he continued, Ottawa will continue to spend to bolster economic growth. Housing price growth has slowed and will continue to, but at this point, a major correction is not being forecasted due to continued supply constraints.

Locally, Burleton said, Durham Region has been a prime beneficiary of the “race for space” in the GTA and will likely outpace Ontario moving forward.

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“We are encouraged by Derek Burleton’s remarks with regards to Oshawa’s local economic recovery,” said Oshawa Mayor Dan Carter. “Businesses and investors across the GTA are showing confidence in our economic future and our prospects for continued growth. Oshawa provides significant value with proximity to global markets, world-class research facilities and a pipeline of talent spanning over 25,000 post-secondary students. Great cities do hard things, solve big issues and create new opportunities to achieve success.”

Oshawa Mayor Dan Carter

Carter provided additional local highlights, including a landmark $2 billion commitment from GM Canada that includes a retooling of the Oshawa Assembly plant, creating 2,600 jobs and attracting a diversified workforce, with more than half of the assembly team made up of female workers. GM Canada’s recent investments also include a 55-acre autonomous vehicle test track and new stamping manufacturing facility, all of which, he said, position Oshawa to play a major role in a new competitive auto industry.

New employment opportunities will continue to meet the needs of Oshawa residents as one of the fastest growing communities in Canada, he added. With a 2.1 per cent population growth in 2020 and 2.3 per cent in 2021, Oshawa will continue to see further residential development in the Kedron and Columbus neighbourhoods.

Councillor Tito-Dante Marimpietri, Chair of the Development Services Committee, closed the event by also speaking to the City of Oshawa’s strong economic growth, anchored by thousands of new employment opportunities and more companies selecting the city for investment and expansion.

“Mr. Burleton’s positive economic forecast for Oshawa signals the results of our strategic vision and focused work at the City,” he said. “With great focus on building a dynamic and sustainable community for all, we welcome new business interests with excitement and an industry-leading commitment to delivering the responsive customer service needed to attract investment. As a community of choice for investors and job creating companies across the GTA, Oshawa’s future is bright indeed.” 

Marimpietri noted that economic forecasts by the Conference Board of Canada project an optimistic outlook for the city at 4.7 per cent GDP growth as well as 8.5 per cent growth in manufacturing. Despite the impact of the global pandemic, total building permits issued in 2021 were the second highest on record in Oshawa’s history totaling over $560 million in addition to 11 new building records. He pointed out that this investment momentum has continued into 2022, as Oshawa’s year-to-date construction records have already surpassed 2021 by $50 million, setting pace for another strong year.

This was the 18th annual Economic Outlook Breakfast presented by the City’s Economic Development Services Branch with TD Bank Group.