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Toronto struggling with unemployment despite boom in jobs: report
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Toronto more than doubled its job creation numbers in 2013, but still struggles with high unemployment, says a new report released Tuesday.
More than 120,000 jobs were created in the city, according to TD Economics’ Metro Beat report, a “whopping” number marking a “spectacular” jump from 2012’s 36,000 jobs and 2011’s 50,000.
However, unemployment in Toronto — at 8.4 per cent — is higher than in any of the main Canadian metropolitan areas reviewed by the bank, although its employment level was still four per cent higher on average than in 2012. (Montreal had the second highest unemployment rate in central Canada, hovering around 8 per cent throughout the year).
“It’s not that dramatic,” said Sonny Scarfone, a TD economic analyst. “Usually the unemployment rate melts … on the back of the labour force shrinking and it just happens that there’s a lot of population growth, so the labour force is expanding and it’s expanding strong.”
The unemployment rate in 2013 was 7.6 per cent overall across central Canadian cities, compared to 6.4 per cent in Atlantic cities and 5.5 per cent in Western cities.
Both population and job growth was fastest out west, in cities like Edmonton, Calgary and Saskatoon, but Toronto led growth among central Canadian cities, including Montreal, Ottawa and Winnipeg.
And while population growth and job creation hasn’t affected its unemployment rate, Scarfone said it “bodes well for momentum moving forward.”
Housings starts and a manufacturing revival will be key areas of focus for the city going forward, he said.
Housing starts were down 30 per cent in 2013, according to Metro Beat, and they’re expected to drop another 20 per cent in 2014 and an additional 7.4 per cent in 2015.
“The market is largely overbuilt … and there is a lot in the pipeline right now,” Scarfone said. “We can expect a pullback in construction as the market will need to absorb all the supply. That’s a downside, obviously.”
And while construction will be “a drag in general,” he said a lower loonie will help revive manufacturing, contingent on the U.S. recovery.
Real GDP growth is forecast to go from 2.0 per cent in 2013 to 2.3 per cent in 2014 and then 2.9 per cent in 2015. Overall, Scarfone said, “Toronto is growing at the pace we expect.”
Torstar News Service
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