Toronto’s economic spring should arrive by the fall
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RSS FeedToronto’s green economic shoots may be a season late, but they are starting to sprout.
One of the most visible areas of strength is the Census Metropolitan Area’s (CMA) new and existing home sales. Over the past six months, existing home sales have trended steadily higher and are up 28% year over year in July compared to 18.2% for the country as a whole.
Also, there are signs that Toronto’s labour market is starting to stabilize. In July, the CMA added 12,500 new jobs, most of which were in information services (+9.8% year over year) as well as in finance, insurance and real estate (+8.1%), education services (+7.5%), accommodation and leisure services (+2.6%) and professional and business services (+2.3%).
Although employment in construction has increased slightly (+5,000) over the past two months, it is still well below (-23.1%) year-ago levels, as is employment in manufacturing (-16.9%), utilities (-15%), transportation services (-9.0%) and public administration (-14.3%).
The combination of a slight increase in labour demand, record low interest rates and a general strengthening of consumer and investor confidence appears to have had a positive impact on retail sales. Over the past three months they have increased by 35% compared to a 30% jump during the same period in 2008.
Looking forward, the prospects for the Toronto CMA appear brighter than they did just three months ago.
Home affordability has improved because of lower interest rates. And an uptick in U.S. activity as well as increased spending on infrastructure projects — such as the recently approved renovation of Union Station and the ongoing upgrade to the Mink Mile on Bloor Street — have also helped to spur the local economy.
Having said this, it will take several quarters before the metro area completely restores its economic health. This outlook is based on the fact that the total value of industrial building permits in the CMA year to date is down by 41.4% and institutional permits are down by 32.4%.
Furthermore, although office-based employment in Toronto was up by 5.6% year over year in July, a near record level of office space under construction will probably put a lid on new commercial construction until well into 2011.
Chart: Reed Construction Data – CanaData.
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Toronto is a major international centre for business and finance. Generally considered the financial capital of Canada, Toronto has a high concentration of banks and brokerage firms on Bay Street, in the Financial District. The Toronto Stock Exchange is the world’s seventh-largest stock exchange by market capitalization. All of the Big Five banks of Canada are headquartered in Toronto, as are a majority of Canada’s corporations.
The city is an important centre for the media, publishing, telecommunications, information technology and film production industries; it is home to Thomson Corporation, CTVglobemedia, Rogers Communications, and Celestica. Other prominent Canadian corporations in Toronto include Sun Life Financial, Four Seasons Hotels, the Hudson’s Bay Company and Manulife Financial with this being like this, they have more cash advance to offer.
Although much of the region’s manufacturing activities take place outside the city limits, Toronto continues to be an important wholesale and distribution point for the industrial sector. The city’s strategic position along the Quebec City-Windsor Corridor and its extensive road and rail connections help support the nearby production of motor vehicles, iron, steel, food, machinery, chemicals and paper. The completion of the St. Lawrence Seaway in 1959 gave ships access to the Great Lakes from the Atlantic Ocean.