May 20, 2021
Ontario’s GDP Down 5% in 2020
Statistics Canada recently provided GDP data broken down by both industry and province for 2020, allowing us to look at whether industries grew or contracted in a year dominated by pandemic disruptions. Ontario’s overall GDP fell by 5.0% in 2020 compared to 2019, the largest decline in the province since records began in 1981. The provinces GDP decline was shared by both broad industry categories in 2020 with goods producing industries down 5.7% and service producing industries down 4.8% compared to 2019. Industries with 2020 GDP falls worth noting are: manufacturing (-10.8%), wholesale trade (-2.0%), retail trade (-3.4%), public sector (-4.8%), mining, quarrying, and oil and gas extraction (-9.6%), and accommodation and food services (-35.8%).
Ontario’s ICI Sector Grew in 2020 Despite Pandemic Disruptions
The construction industry was one of the few in Ontario that saw growth in 2020. Other noteworthy industries that grew in 2020 were: finance and insurance (+5.0%), real estate and rental and leasing (+1.6%), and agriculture and forestry (+10.8%). Ontario’s construction industry grew by 0.3% compared to 2019, amounting to $50.9 billion or 7.2% of the province’s GDP in 2020. This is a greater share of Ontario’s GDP than in 2019, when the construction industry’s GDP-share was 6.8%.
There was divergence in GDP growth among the different sectors of Ontario’s construction industry. The GDP of Ontario’s ICI construction sector increased by 3.6% in 2020, up to $8.9 billion or 1.3% of the province’s GDP. The residential sector’s GDP grew by 4.4% in 2020, while the GDP of repair construction fell by 1.6%, and the GDP of engineering and other construction activities fell by 9.1% compared to 2019.
Ottawa’s ICI Construction Price Growth Outpaces Toronto in Q1
Statistics Canada recently released its building construction price index data for Q1. The quarterly index looks at changes over time in the prices charged by contractors to construct a range of buildings in eleven metro areas in Canada, including two in Ontario: Toronto and Ottawa.
Ottawa’s ICI construction prices were up by 4.9% in the first quarter of 2021 over Q1 2020, the biggest increase among the eleven metro areas in Canada included in the index. Toronto’s prices increased by 3.0% compared to last year’s first quarter. Ottawa also saw greater year-over-year price increases at the sector level relative to Toronto. Commercial building construction prices in Ottawa increased by 5.0% compared to Q1 2020, while institutional prices increased by 4.8% and industrial prices increased by 4.5%. Toronto’s industrial building construction prices were up by 3.3% in the first quarter over Q1 2020, while commercial and institutional prices were both up by 3.0%.
It is worth noting the increases in the residential building construction price index. In Ottawa, residential construction prices were up by 14.6% in Q1 2021 over Q1 2020, while Toronto saw an increase of 15.0%.
Statistics Canada reports that the higher construction prices are mostly due to shortages in construction materials including softwood lumber, veneer and plywood.
Export Development Canada’s most recent data shows that material prices have increased substantially both month-over-month and year-over-year. As of the latest date (May 18), copper prices are up 12.1% over last month, and double what they were this time last year (+99.4%). Steel Scrap prices are up by 15.1% compared to last month, and have also nearly doubled over last year (+97.2%). Lumber Composite has more than quadrupled over last year (+333.2%), and increased by 16.0% over last month.
Source: Export Development Canada Commodity Tracker (Published May 19, 2021)
FOR MORE INFORMATION, CONTACT:
Director of Research
Ontario Construction Secretariat (OCS)
180 Attwell Drive, Suite 360, Toronto, ON M9W 6A9
P 416.620.5210 ext. 222