Conference Board of Canada predicts rough ride until 2021
With an economy that shrank 3.9 per cent in the first quarter, and signs it will contract another 22.4 per cent in the second, Ontario is in its first recession since 2009.
However, the Conference Board of Canada said with the ability of a large contingent of workers able to do their job from home, and government stimulus packages, the provincial economy will fare better than Canada’s.
It released its report, “No Province Spared From Recession” Wednesday.
It said Canada’s real Gross Domestic Product would fall 25 per cent in the second quarter, a decline the board called “off the charts.”
Ontario had a net loss of 103,000 jobs in the first quarter and can expect to lose another 439,000 in the second. The report said the unemployment rate would average 11.5 per cent in the second quarter.
Simultaneously, government stimulus, like the Canada Emergency Response Benefit, will mean disposable income in Ontario households is expected to fall by 2.1 per cent, “far less than the economic contraction would suggest.”
The economy is still expected to pick up in the third quarter with double-digit growth between then and the second quarter of 2021. It will vary by industry with manufacturing, retail, and construction leading the way early on. Accommodation and food services will take longer to recover, and may not see a full recovery until 2022.
The provincial economy could grow by 5.9 per cent in 2021, and 2.1 per cent in 2022.
By comparison, according to the report, the national rebound should be in full swing, with economic growth measuring 6 per cent in 2021.