Kristin Goff
The Ottawa Citizen
Thursday, October 03, 2002
Ottawa's economic performance, ranked second-worst of 18 Canadian cities this year, is on its way to better days, says an economist with the Conference Board of Canada.
"The worst is behind us," Mario Lefebvre, associate director of economic services, said yesterday. "We're now in a positive growth zone, and we started that in the second quarter."
For next year he predicts a solid 3.5-per-cent growth in Ottawa's GDP -- its first appreciable growth since 2000. The recovery is expected to continue for a few years, Mr. Lefebvre told the Ottawa Real Estate Forum.
On average, Ottawa will rank sixth-best for economic performance from 2003 through 2006, Mr. Lefebvre said in a preview of the Conference Board's upcoming Metropolitan Report, due out in a couple of weeks.
Ottawa's economic growth will still show a slight negative of about 0.5 per cent for the full year because the downturn early this year was so steep it has pulled the annual average down, he said. But employment growth, fuelled by the public service, strong consumer spending and a hot housing market that has buoyed the construction industry, have offset many effects of the tech wreck.
"We are coming back slowly. The impressive thing is, we are making our way back even though (technology-heavy) manufacturing is still struggling quite a bit," he said.
By August this year, employment had reached 581,000, just a half percentage point below its peak in February 2001. If manufacturing were taken out of the equation, employment in Ottawa would be the highest ever, Mr. Lefebvre said.
His message to the commercial real estate conference was tempered by some less cheery views. Ottawa's manufacturing sector -- largely of telecommunications and high-tech manufacturing companies -- isn't in recovery mode yet and isn't likely to return to its heyday.
That sector suffered a 22-per-cent drop in output this year and will continue to slide, at least in early 2003, resulting in a 2.5-per-cent loss for the year.
Mr. Lefebvre said the Conference Board economists have also fundamentally changed their view on recovery in the tech-heavy manufacturing sector, which earlier forecasts had assumed would bounce back to highs set in 2000 in only a few years.
"About 13,000 jobs have been slashed, and we're not expecting them to come back," he said. "Slow growth in manufacturing will recoup somehow. But we're not going anywhere near where we were in 2000."
Jeffrey Dale, president of the Ottawa Centre for Research and Innovation (OCRI) offered a more optimistic view of technology's future in his comments at the conference. Mr. Dale sees significant growth trends in smaller tech companies, growing out of the massive downsizing by such giants as Nortel, JDS Uniphase, Alcatel and others.
Hard times are starting to "redistribute the labour pool" as laid-off workers move to new or existing startups or into consulting in related fields, he said.
OCRI counts tech workers somewhat differently than the Conference Board. By its calculation, 15,000 of the 25,000 workers laid off since technology's peak have found work elsewhere. Even more surprising, said Mr. Dale, has been the growth in formation of new companies. About 300 new technology companies have sprung up in the city since 2000.
The Ottawa Citizen
Thursday, October 03, 2002
Ottawa's economic performance, ranked second-worst of 18 Canadian cities this year, is on its way to better days, says an economist with the Conference Board of Canada.
"The worst is behind us," Mario Lefebvre, associate director of economic services, said yesterday. "We're now in a positive growth zone, and we started that in the second quarter."
For next year he predicts a solid 3.5-per-cent growth in Ottawa's GDP -- its first appreciable growth since 2000. The recovery is expected to continue for a few years, Mr. Lefebvre told the Ottawa Real Estate Forum.
On average, Ottawa will rank sixth-best for economic performance from 2003 through 2006, Mr. Lefebvre said in a preview of the Conference Board's upcoming Metropolitan Report, due out in a couple of weeks.
Ottawa's economic growth will still show a slight negative of about 0.5 per cent for the full year because the downturn early this year was so steep it has pulled the annual average down, he said. But employment growth, fuelled by the public service, strong consumer spending and a hot housing market that has buoyed the construction industry, have offset many effects of the tech wreck.
"We are coming back slowly. The impressive thing is, we are making our way back even though (technology-heavy) manufacturing is still struggling quite a bit," he said.
By August this year, employment had reached 581,000, just a half percentage point below its peak in February 2001. If manufacturing were taken out of the equation, employment in Ottawa would be the highest ever, Mr. Lefebvre said.
His message to the commercial real estate conference was tempered by some less cheery views. Ottawa's manufacturing sector -- largely of telecommunications and high-tech manufacturing companies -- isn't in recovery mode yet and isn't likely to return to its heyday.
That sector suffered a 22-per-cent drop in output this year and will continue to slide, at least in early 2003, resulting in a 2.5-per-cent loss for the year.
Mr. Lefebvre said the Conference Board economists have also fundamentally changed their view on recovery in the tech-heavy manufacturing sector, which earlier forecasts had assumed would bounce back to highs set in 2000 in only a few years.
"About 13,000 jobs have been slashed, and we're not expecting them to come back," he said. "Slow growth in manufacturing will recoup somehow. But we're not going anywhere near where we were in 2000."
Jeffrey Dale, president of the Ottawa Centre for Research and Innovation (OCRI) offered a more optimistic view of technology's future in his comments at the conference. Mr. Dale sees significant growth trends in smaller tech companies, growing out of the massive downsizing by such giants as Nortel, JDS Uniphase, Alcatel and others.
Hard times are starting to "redistribute the labour pool" as laid-off workers move to new or existing startups or into consulting in related fields, he said.
OCRI counts tech workers somewhat differently than the Conference Board. By its calculation, 15,000 of the 25,000 workers laid off since technology's peak have found work elsewhere. Even more surprising, said Mr. Dale, has been the growth in formation of new companies. About 300 new technology companies have sprung up in the city since 2000.
