Thunder Bay's economy will rebound in 2021, albeit modestly, once the impacts of the government-imposed restrictions are relaxed, according to the Conference Board of Canada.
The Ottawa-based strategy think-tank put northwestern Ontario's largest city under the microscope in analyzing all aspects of the local economy and making its forecast for growth.
"Next year looks much better," the Conference Board summarized in its assesement of the city with an improved housing market; better prospects for its tourism, accommodation and arts/entertainment sector; and expansion predicted in manufacturing, construction, primary and the utility industries.
Thunder Bay's economy will take a hit with GDP falling 4.5 per cent, including a 6.2 per cent drop in the second quarter of this year that will be partially offset by a 2 per cent rebound by the third.
"We expect a decent recovery in 2021, with GDP advancing 3.6 per cent," the report said.
The city's unemployment rate was 5.7 per cent last year, up from 5.1 per cent in 2018. The Conference Board predicts an average unemployment rate of 7.9 per cent for 2020, based partially on the 11.5 per cent posted in this year's second quarter. Modest labour market improvement is forecast for 2021 with employment expanding by 1.6 per cent and an unemployment rate of 5.8 per cent.
Housing starts and the resale market will both be hit by the coronavirus, and starts will dip to only 71 units. A modest recovery is in store for next year, supported by low interest rates and federal programs. Starts for 2020 are estimated to reach near 160 units, down from the 20-year average of 232 dwellings.
In-migration to the city will stall due to travel restrictions. Last year, Thunder Bay recorded a total record high of international newcomers of nearly 1,200 people, but net interprovincial migration was in the minus column for the 31st straight year.
For 2020, the Conference Board expects the net number of newcomers to fall below 100 people. This will trim Thunder Bay’s overall population growth to about 275 in 2020, or 0.2 per cent, down from the yearly average of around 420 during the five years up to 2019.
The city's finance, insurance, and real estate sectors, which contracted by 3.6 per cent by output in this year's second quarter, will end the year up an average of 1.3 per cent over 2019, thanks to a strong half of the year.
Social distancing rules and etiquette will cut deeply into Thunder Bay’s accommodation and food services scene by 44.3 per cent and its arts and entertainment industry by 17.7 per cent.
By contrast, output in the publicly funded health care sector will expand by 2.5 per cent.
The Conference Board predicts that the city's battered retail sector will contract six per cent this year, however the easing of the pandemic should allow for a three per cent expansion in 2021.