Buoyed in part by mining, the Greater Sudbury area is expected to continue its path toward pandemic recovery with an employment rate jump and a GDP increase of 3.9 per cent.
This, according to the Conference Board of Canada’s “Major City Insights Greater Sudbury” report issued this week, which also warns life will become less affordable.
“Demand for nickel to produce batteries for electric cars is good news for Greater Sudbury,” according to the report. “Although nickel prices have come down recently, they will likely remain high by historical standards because of the war in Ukraine.”
The local nickel industry received a boost this year when Vale signed a long-term deal with Tesla to supply the U.S.-based electric vehicle company with nickel.
After rising by 3.9 per cent this year, the GDP is expected to experience a “healthy gain” of 2.7 per cent next year, which will “finally lift the city’s economic output beyond pre-pandemic levels.”
“Restaurants, bars, hotels, and entertainment facilities will record job gains of more than 30 per cent this year,” according to the report, which also notes these sectors were hardest hit during the pandemic, during which the sector saw employment numbers plunge from 5,000 (2019) to 3,000 (2021).
It will take until 2024 until overall employment returns to pre-pandemic levels, “partly because job gains will slow down sharply once the employment upheaval linked to the pandemic fades.”
Employment is anticipated to increase by 4.5 per cent this year before dropping to a less than one per cent increase in 2023.
Despite overall economic gains, life will become less affordable for the average Greater Sudburian.
“Some Sudbury residents will dip into their savings to maintain purchasing power as, similar to the situation in other Canadian cities, wage increases aren’t keeping up with inflation,” according to the report.
It is also noted inflation is forecast to slow down over the next few years to annual increases of around two per cent, but this anticipated drop will partly depend on the outcome of the war in Ukraine.
Consumer prices increased by 3.5 per cent in Sudbury last year, and an even greater jump of 5.8 per cent is anticipated this year partly due to surging energy prices.
“With consumer prices increasing faster than per capita income over the near term, Sudbury residents will find it challenging to maintain their purchasing power,” according to the report. “Many will dip into savings built up during the pandemic to keep purchasing goods and services.”
Household income per capita was $53,330 in Greater Sudbury in 2021, and is expected to grow only marginally to $53,984 this year.
Other key highlights in the Conference Board of Canada report include:
- Sudbury’s population growth increased by 0.1 per cent last year, and a similar gain is anticipated this year, followed by weak population growth in subsequent years
- Retail sales increased by 5.4 per cent in 2021 and are anticipated to grow by 5.9 per cent this year before they drop to 1.6 per cent next year as pent-up demand eases
- Due to an “aging and slow-growing population,” the city’s economic expansion is expected to slow down to the 1- to 1.5-per-cent range into the long term
Labour shortages are expected to continue in the service industries, manufacturing and mining sectors, though the city’s participation in the Rural and Northern Immigration Pilot program might help by fast-tracking skilled immigrants to become permanent residents
