Sudbury’s unemployment rate expected to drop to six percent by 2016; back to pre-recession lows, says a reporter by BMO Capital Market Economics.
The next four years will bring 4,000 new jobs to Sudbury, according to a the report released last week.
The report on Sudbury is the latest in a series of economic and business overviews for various cities across Canada that will be published by BMO throughout the year.
“BMO’s latest economic snapshot on Greater Sudbury shows us that our economy is still going strong and will for the next few years to come,” stated Mayor Marianne Matichuk in a BMO release. “With an estimated 4,000 new jobs projected by the end of 2016, this is great news for our residents.”
“Businesses in Sudbury are driving forward with plans to invest in their operations, in new equipment, in expansion and in hiring people,” said Steve DeMarco, Commercial Banking Area Manager, Central Northern Ontario District, BMO Bank of Montreal.
“They are looking for capital to expand and create jobs; they are looking for a degree of certainty that funds will be available when they need them. I believe that BMO’s commitment to make $10 billion in credit available for businesses in Canada over the next few years can make a big difference to companies looking to invest across the region. My roots run deep in Greater Sudbury and I am excited for what lies ahead.”
Surging commodity prices and their positive impact on mining have been a major driver of the relative improvement. Looking out over the medium term, Sudbury’s unemployment rate should drift down toward six percent by 2016, about half a percentage point below the Ontario average and back near the pre-recession lows.”
Rising base metal prices and demand over the past decade has been a boon for the key mining sector.
Nearly 10 per cent of Sudbury’s workforce is directly employed in the mining sector, with the impact much larger when considering related manufacturing and service activities.
Recent announcements point to continued growth in the sector going forward. Vale is in the midst of a five-year, $10 billion, investment in its Canadian operations, and Cliffs Natural Resources recently announced it will spend more than $3 billion to mine chromite – a key ingredient in stainless steel – in Northern Ontario’s ‘Ring of Fire’. The company will build a processing facility near Sudbury, costing almost $2 billion and expected to add 450 construction jobs, and ultimately 450 permanent jobs, when in operation.
Population growth has slowed to slightly above zero in recent months, but the performance in recent years has been historically strong.
The city has enjoyed positive population growth in each of the past 10 years, after a prolonged stretch of outright declines during much of the 1990s.
Housing demand has been firm in recent years, spurred by positive population growth. As a result, housing starts totalled nearly 600 units in the latest twelve months, near the highest level in 17 years.
The resale housing market is also strong, with existing sales up 14.1 per cent year-over-year in the 12 months through April, pushing average prices to a record level of more than $240,000. Still, affordability remains relatively attractive in the city, with prices averaging slightly more than three times the estimated median family income, miles below valuations currently seen in Ontario’s bigger cities.
The full report can be found at www.bmocm.com/economics.