The 2021 Ontario Economic Report is Here!
This week, 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 include:
- 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.
- 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 organizations over the next year. o 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.
- The majority (58 percent) of survey respondents said their organizations shrank between April and September, while only 17 percent grew.
- Employment growth declined throughout the province in 2020, with 47 percent of organizations indicating they let employees go due to COVID-19.
- 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.
- 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.
Muskoka-Kawartha Economic Region Highlight:
- 2020 Employment data shows far fewer job losses in Muskoka-Kawarthas than other regions in 2020 (change in employment was -0.9 percent in Muskoka-Kawarthas and -4.9 percent across Ontario).
- Survey respondents in the Muskoka-Kawartha region indicate that 48% have let staff go while 42% experienced change and 10% have or plan to hire.
Muskoka-Kawarthas region is projected to have a lower jobless rate of 7.3% in 2021 compared to 9.2% in 2020.
- The rate of change in employment is projected to be higher at 4% compared to the 0.9% experienced in 2020.
- The region is also projected to have a lower population growth rate of 0.9% compared to the 1.1% recorded in 2020.
- 50% surveyed businesses in the Muskoka-Kawartha region felt the community provided enough economic activity for their business to thrive, while 37% did not feel they could thrive.
This years report is interactive and includes information from recent OCC Member Surveys as well as economic forecasting.
Looking to 2021
No business, region, sector, or demographic should be left behind in the pursuit of economic recovery and growth. Support programs and pro-growth policies should be targeted towards those experiencing the most pronounced challenges. A focus on reskilling as well as widespread access to broadband infrastructure and capital will be necessary to the revival of small business and entrepreneurship as well as an inclusive and robust economic recovery.