Ottawa-Gatineau's economy still struggling in the face of public sector austerity

OTTAWA, May 14, 2015 /CNW/ - Strength in construction and high-tech services is expected to compensate for a further decline in Ottawa-Gatineau's vital public administration sector, allowing economic growth to improve to a still modest 1.3 per cent this year, according to The Conference Board of Canada's Metropolitan Outlook: Spring 2015.

"As a government town in an era of public sector austerity, Ottawa-Gatineau has struggled with economic growth of below 1 per cent for three consecutive years, including last year's 0.6 per cent," said Alan Arcand, Associate Director, Centre for Municipal Studies. "Slight improvement is on the way as declines in the public sector eases."

HIGHLIGHTS

• Ottawa-Gatineau's real GDP will grow by 1.3 per cent in 2015, up from 0.6 per cent in 2014.
• The area's growing high-tech services sector and large scale infrastructure projects like light-rail transit will offset continued public sector weakness.
• Toronto, Vancouver and Halifax are the fastest growing metropolitan economies in the country this year.

Public administration output is expected to shrink a further 0.6 per cent in 2015. Growth should resume in 2016, followed by average gains of 1.8 per cent annually between 2017 and 2019.

The area's non-residential construction sector is booming, headlined by the light-rail transit project slated to continue through 2018 and the $200-million project to widen the Queensway. The 2017 sesquicentennial anniversary of Confederation has also prompted a variety of infrastructure projects, including the renovation and enhancement of the National Arts Centre, and the rehabilitation of the Government Conference Centre. Overall, construction output is set to increase by 1.8 per cent this year.

Aside from a sagging public sector, Ottawa-Gatineau's services sector is quite healthy. Led by large new shopping centres, including stores at Lansdowne Park and the Tanger Outlets, the wholesale and retail trade sector will continue its expansion with a 2.2 per cent output increase in 2015. The business services sector, which includes several fast-growing high-tech firms, is to expand by 2.4 per cent this year. All together, services sector output is forecast to grow by 2.2 per this year, the same pace as last year.

With the exception of Calgary, Edmonton, Regina and Saskatoon, most of the 13 CMAs covered in the report will see their economic fortunes improve this year, boosted by lower oil prices, a weaker Canadian dollar and improvement in the U.S. economy. Toronto, Vancouver and Halifax are the fast growing metropolitan economies this year, with each posting growth of 3.1 per cent.

Ontario's economy is projected to grow by 2.9 per cent this year, bolstered by a pick up in exports and consumer spending. The Canadian economy is expected to expand by a moderate 1.9 per cent, due to the effects of plummeting oil prices.

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SOURCE Conference Board of Canada

Yvonne Squires, Media Relations, The Conference Board of Canada, Tel.: [phone] ext. 221, E-mail: [email protected]; or Juline Ranger, Associate Director of Communications, The Conference Board of Canada, Tel.: [phone] ext. 431, E-mail: [email protected]