For immediate release
January 28, 2021
2021 ONTARIO ECONOMIC REPORT KEY FINDINGS – BACKGROUNDER
(BURLINGTON, JANUARY 26, 2021) – Today, the Burlington Chamber of Commerce and the Ontario Chamber of Commerce (OCC) released the fifth annual Ontario Economic Report (OER), providing the latest data on Ontario’s economy and business confidence, highlighting the unprecedented year that was 2020 and the unpredictability that lies in the year ahead.
Key highlights from the OER include:
- Data provided by the Bank of Montreal indicates that Ontario witnessed a steep decline in real GDP growth (-5.6 percent) in 2020 but is projected to see a moderate rebound of 4.8 percent in 2021, fuelled largely in part by expectations for vaccination rollout and the eventual re-opening of the economy.
- Projections for the coming year suggest moderate GDP and employment growth across most regions, suggesting a near-full recovery after steep drops in 2020.
- In 2020, only 21 percent of survey respondents expressed confidence in Ontario’s economic outlook. Less than half of Ontario businesses (48 percent) are confident in the outlook of their own organisations over the next year.
- Small businesses are more pessimistic about Ontario’s outlook than larger ones. Only 20 percent of small businesses expressed confidence in Ontario’s economy, compared to 27 percent of medium and large businesses.
- Confidence also varied considerably across sectors of the economy, a testament to the uneven nature of the pandemic. The most pessimistic sectors were accommodation and food services (62 percent were not confident in Ontario’s outlook); arts, entertainment, and recreation (55 percent); and retail trade (51 percent).
- Employment growth declined throughout the province in 2020 and is expected to make a steady recovery in the year ahead.
- 47 percent of organizations indicate they let employees go due to COVID-19 (23 percent permanently and 24 temporarily).
- Amid the second wave, 53 percent of businesses surveyed said their organizations shrank between June and November; while only 19 percent grew.
- Sectors most negatively impacted by the crisis included: accommodation and food services; arts, entertainment, and recreation; and retail. Businesses in these sectors were among those most pessimistic about the economic outlook and most likely to have shrunk and let go of staff in 2020.
- In some of these sectors, more than two-thirds of organizations let staff go: labour (83 percent), accommodation and food services (70 percent); arts, entertainment, and recreation (68 percent); and transportation and warehousing (67 percent).
- Fewer than one-third of organizations let staff go in the following sectors: management firms (14 percent); utilities (20 percent); government (25 percent); finance and insurance (25 percent); non-profits (31 percent); and real estate, rental and leasing (33 percent).
- From a regional perspective, businesses were most likely to say they shrank in Hamilton-Niagara Peninsula (70 percent) and Northwest Ontario (68 percent). These are two regions that reported above-average employment losses in 2020. A more detailed analysis of regional employment numbers can be found in Ontario’s Economic Outlook.
- Despite lagging confidence in Ontario’s economic outlook and ongoing regional and sectoral disparities in how businesses have been impacted by the crisis, an encouraging 60 percent of businesses believe their communities have enough economic opportunities for them to thrive.
- Further, 60 percent of businesses reported feeling confident that entrepreneurship would rebound after the pandemic. Entrepreneurship and small business growth will play an essential role in Ontario’s economic recovery.
- Businesses’ priorities for governments during economic recovery included enhancing access to capital, reforming business taxes, encouraging Ontarians to buy local, and investing in broadband infrastructure.
CLICK HERE TO REVIEW THE INTERACTIVE REPORT.
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Director, Stakeholder Relations & Policy