RECIPE FOR SUCCESS
Economist predicts 2013 will be another year of middling growth
Attracting and retaining a skilled labour force is called the biggest challenge facing Ontario’s economy,
Ontario is facing another year of middling growth as worries over massive debt in the U.S. and Europe and the high-flying Canadian dollar weigh down the economy, a Bank of Montreal economist says.
“The year ahead will look a lot like the year behind with one notable difference: A warmer American consumer and housing market will replace a cooler Ontario consumer and housing market,” said Sal Guatieri, senior economist at BMO Capital Markets.
BMO expects growth in Ontario to come in at about 2 per cent this year and next.
That’s about the same as last year, and about one percentage point lower than resource-rich Western provinces.
Guatieri delivered the forecast at the Ontario Chamber of Commerce’s latest Regional Economic Leadership event in Toronto on Thursday.
The business lobby group has held events across Ontario to give local members a way to voice their concerns over the province’s economy. The final session will be held in London next week.
The regional series is a precursor to the annual Ontario Economic Summit in Niagara-on-the-Lake in November. Ontario Premier Dalton McGuinty and Chicago Mayor Richard Daley will be among the guests at the three-day event.
The need to develop a modern, skilled workforce is at the top of businesses’ concerns, said Allan O’Dette, president and chief exec- utive officer for the Ontario Chamber of Commerce.
“That’s the No. 1 thing I hear around the province,” he said. “There’s a significant gap in the labour market in terms of supply and demand.”
That includes everything from plumbers to researchers to engineers to heavy equipment operators and mechanics, O’Dette said.
Economists say that developing a stronger workforce will be crucial as Canadian companies increasingly look to global markets. Today, 80 per cent of Ontario’s international exports go to the U.S., while just 4 per cent go to Asia. Asia is “where the growth is,” Guatieri said. Ontario firms must also be prepared to take advantage of the high Canadian dollar to invest in hightech equipment and software, and become more competitive, he added. Ontario’s jobless rate has been stuck at 8 per cent for the past 18 months. But the province is likely to stay out of recession in the coming year thanks to low interest rates and stable commodity prices. In the meantime, Ontario’s forestry industry will benefit from the recovery in the U.S. housing market and the auto industry will strengthen as American buyers replace aging vehicles.