- Front Page
October 23, 2012
Northeast Economic Region
The Northeast Economic Region covers Greater Sudbury and the districts of Nipissing, Parry Sound, Manitoulin, Sudbury, Timiskaming, Cochrane and Algoma and is home to over 560,000 residents. The region’s basic industries are mining, forestry, utilities and health care.
This region’s economic outlook through 2014 includes modest population growth, driven by workers migrating to major projects. Modest employment growth is forecast, leading to continued, decelerated growth in housing markets and private sector non-residential building construction. Public sector non-residential building construction declines due to fiscal tightening.
Major projects in the northeast region include Ontario Hydro’s $2.5 billion investment in hydroelectric infrastructure in the Lower Mattagami River north of Timmins. This project is expected to remain under construction through 2015, with employment estimated at 600 persons. Vale’s emission reduction project at the Copper Cliff Smelter in Sudbury is underway. The projected cost is $2 billion over the next four years, with anywhere from 800 to 2,000 workers expected on site, at any given time. The $1.45 billion Detour Lake gold mine restart and mill addition northeast of Cochrane is expected to remain under construction through 2013, with production beginning in 2014. Construction is projected to begin in 2013 on Vale’s $814 million Copper Cliff underground nickel mine expansion near Sudbury. Black Thor’s $1.4 billion chromite mine and smelter project north of Sudbury is delayed with construction unlikely to begin before 2015.
The population of this region has been inching down at approximately 0.3 per cent per year since 2006 but is forecast to see modest growth through 2014. Net in-migration by workers on major projects will lead to population growth of 0.2 per cent per year through 2014. The growth rate of households will be in line with that of population.
Employment in Northeast Ontario dropped sharply in the 2009 recession but has largely recovered since then. Job growth was a robust 2.8 per cent in 2011 but is forecast at just 0.3 per cent in 2012. So far this year, job growth has been led by retail-wholesale trade and accommodation-food services.
However, gains in these and other service industries have been offset by lower employment in manufacturing, construction and business-building support services. Investment in mines, smelters, power generators and housing will lead to modest job growth through 2014, although fiscal tightening by federal and provincial governments will largely offset those gains.
Industries expected to see higher employment include retail-wholesale trade, construction, primary resources and transportation. Industries expected to shed jobs include health-social services, education and public administration.
Employment is forecast to increase 1.5 per cent in 2013 and 0.3 per cent in 2014. Forecast employment growth exceeds labour force growth, bringing the region’s unemployment rate down to 5.3 per cent in 2014 from 7.8 per cent in 2011.
Housing market activity in the Northeast region is forecast to remain fairly active through 2014, although growth decelerates from the past two years. Current and forecast employment drives MLS housing unit sales up 1 per cent in 2012 and 8 per cent in 2013, before they level off in 2014. Forecast unit sales drive the average MLS house sale price up 7 per cent this year, 4 per cent in 2013 and 10 per cent in 2014.
Residential building permits are forecast to inch up 2 per cent in 2012, before growth accelerates to 10 per cent in 2013 and 4 per cent in 2014. The outlook for private sector non-residential building activity is driven by current or forecast population and housing growth. The outlook for public sector non-residential building activity is driven by fiscal tightening at both the federal and provincial level.
Overall non-residential building permits are forecast to rise 5 per cent in 2012, as strong growth in private sector construction of commercial and industrial buildings continues to outweigh sharp declines in public sector building construction. Little change is forecast in 2013 and 2014 from the 2012 level of both public and private sector non-residential building permits.