Ontario's Economy Will Gather Steam Over The Next Two Years, Says Central 1 Credit Union Forecast

TORONTO, ONTARIO--(Marketwired - June 25, 2015) - Economic growth in Ontario will gain momentum over the next two years but remain modest, says a new forecast by Central 1 Credit Union.

Continued strong growth in the U.S. and improving domestic fundamentals, such as rising personal incomes and corporate profits, will drive expansion in Ontario, says Steve Stinson, Senior Economist, Ontario, for Central 1 Credit Union.

"Rising interest rates will not derail the economy or cause a housing crash," Stinson says. "Growth in 2015 is forecast to rise 2.4 per cent in real Gross Domestic Product (GDP), 2.6 per cent in 2016 and 2.8 per cent in 2017."

The unemployment rate is forecast to decline to 5.5 per cent in 2017 from an expected 6.5 per cent in 2015 and 7.3 per cent in 2014. Slow labour force growth and gradually higher employment growth will generate tighter labour market conditions putting upward pressure on wages.

Highlights:

• The 2015 Pan Am/Parapan Am Games will provide a temporary boost this year.
• Tighter labour markets are ahead.
• Home sales and prices will keep rising.
• Low population growth ahead.

Many things have changed since the previous forecast in late 2014: oil prices have plunged, the loonie is lower, forecasts for U.S. and Canadian growth have been cut and interest rates have stayed low. But the overall impact of these changes on the forecast is mixed.

"We believe exports will continue to benefit from the lower Canadian dollar and the still improving U.S. economy," Stinson says.

Read the full report Ontario Economic Forecast 2015-2017.

About Central 1

With offices in Vancouver, Mississauga and Toronto, Central 1 - which holds approximately $13 billion in on balance sheet assets - provides wholesale financial products, trust services, investment banking services, along with digital and payment services that power innovation in retail financial services for more than 300 credit unions and institutional clients from coast to coast.

In addition, Central 1 is the primary liquidity manager, payments provider and trade association for our member/owner credit unions in B.C. and Ontario. Our members represent a consumer-oriented, full-service retail financial system that serves 3.3 million members and holds more than $99 billion in assets. For more information, visit www.central1.com.