,,,,,,,,,,,,,,,,,Local TBay Commentary.............
THUNDER BAY — Economic indicators for 2023 suggest that Thunder Bay has had a reasonably good year, according to a local expert.
THUNDER BAY — Economic indicators for 2023 suggest that Thunder Bay has had a reasonably good year, according to a local expert.
The average monthly employment in 2023 to date surpassed 2022 by about three per cent, which represents nearly 2,000 new jobs.
While average monthly employment appears to have recovered from the pandemic, it still has yet to surpass the 2018 level, noted Livio Di Matteo, professor of economics at Lakehead University.
"The seasonally adjusted unemployment rate remains below five per cent and the average for 2023 remains lower than 2022, which suggests that the labour market does not have a lot of slack in it," he said. "Along with employment opportunities being generated in large public sector construction projects in both the city and the region, there is also substantial activity in the local retail and tourism sector with the opening of new retail and food service outlets as well as a very successful cruise ship season."
Di Matteo pointed out that the port is also seeing growing grain shipments. He said overall, Thunder Bay has seen healthy economic activity, despite the recent rise in interest rates, as a result of continued activity in its traditional sectors of construction, forestry and port activity combined with activity on the mining front.
Population and housing starts could grow.
"As a result, population is expected to rise, albeit at rates well below provincial and national growth rates," he noted. "While housing starts are not at historic highs, there nevertheless has been a fair amount of activity, particularly in the multi-residential unit sector."
According to the Conference Board of Canada, Di Matteo says housing starts in Thunder Bay are expected to grow but are unlikely to exceed 240 units annually.
"Perhaps the biggest impact locally is the construction of Thunder Bay's $1.2-billion jail, which until completion in 2025, will drive Thunder Bay's labour market and economy even if the Canadian economy slows down in 2024," he said. "However, completion of the project will likely see a ramping down of economic growth in the economy and in the absence of new projects an alleviation of a relatively tight labour market, particularly in building trades."
Heading into 2024, employment growth is expected in construction, transport and warehousing, health care and social assistance, accommodation and food services and public administration.
Declines expected in some areas, "Other sectors such as manufacturing, utilities, professional and scientific services, and educational services are expected to remain flat or even decline slightly," he said, adding declines can particularly be expected in the areas of educational services given regional demographics and public funding levels as well as the local finance, insurance and real estate sectors given the rise in interest rates.
"The post-secondary sector in Thunder Bay is also in uncertain territory given the dependence on volatile flows of international students and lack of clarity from the government as to what directions in funding it may pursue in the wake of the Blue-Ribbon Panel Report."
The blue-ribbon panel is commissioned by the Ontario government to review and advise on the enhancement of financial sustainability and accessibility in the post-secondary sector.
Ahead, Di Matteo says there is some economic uncertainty on several fronts. The long-term outcome of the sale of Resolute Forest Products to Atlas Holdings on both local production and employment levels remains to be seen. He said the future of the Alstom plant is also always precarious in the absence of a major transit project to generate longer-term employment.
Lithium remains a possible bright spot.
"As for the future of lithium refining in the region by companies such as Rock Tech Lithium, Toronto's Avalon Advanced Materials and Green Technology Metals of Australia, there are positive expectations," he noted. "However, despite purchases of waterfront land, to date, these are all plans, and it is unclear if any of these companies will be able to raise the necessary funds either publicly or privately to finance their activity in the face of international competition in the industry."
Also, the demand for fully electric vehicles — a key driver of the demand for lithium — has also been exhibiting weakness given the cost of the vehicles, their range, the availability of charging facilities and competition from alternatives such as hybrids as well as traditional gasoline-powered vehicles.
"As a result, the lithium refining industry in Thunder Bay and Canada may remain a work in progress for the foreseeable future," he said.
While Thunder Bay cannot influence the forces and trends of the national or international economy, Di Matteo said it can make itself as attractive a jurisdiction for business investment as it can.
He said that means continuing to provide quality-of-life amenities, a range of quality and timely services for all demographic groups and a competitive local municipal service and tax environment.