Eastern Canada Construction Outlook, 2010–2012
Ontario
Ontario, along with B.C. and Alberta, has been one of the provinces most affected by the hard times. Toronto has come under fire from several major sectoral crises during the recession. First, the financial community was besieged as major banks in the U.S. and elsewhere were sent into bankruptcy or required government bail-out money. However, Canada’s financial community survived the test very well. The international stature of Canada’s banking sector, in terms of its conservative lending practices and ability to withstand liabilities-to-capital scrutiny, has been raised considerably.
Then there were the auto sector problems. Chrysler and General Motors descending into bankruptcy protection and accompanying resizings have cost jobs in Ontario. Things are looking up again, however, since new ownership is now in place at both companies. Given the size of government involvement and the fact that the public sector has rarely demonstrated much talent for running businesses, this may just be forestalling another round of problems down the road. But that’s for worrying about later, when the economy overall will be in better shape.
Ontario’s homebuilding sector is under stress, but this may alter course with the pick-up in existing home sales. Bargains are to be had both in terms of prices and the exceptionally low mortgage rates that are currently in place. The biggest overhang is in the condominium market in Toronto. Project financing has been an issue, given the credit crunch, and purchasers have been left wondering about their commitments. The inventory of finished but unsold condominiums is too high by double. This needs to be rectified.
Ontario’s economic problems are highlighted by its labour markets. The seven cities with the highest unemployment rates in Canada are all in Ontario, headed by Windsor at 14.8%. Manufacturing activity levels will continue to be challenged by the strength in value of the Canadian dollar versus the greenback. A major disappointment for contractors is the postponement of new nuclear power facilities. The problems at Atomic Energy of Canada Ltd. are partly the reason for the reassessment of spending plans.
http://www.nostco.com
Source - Daily commercial news
