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Sudbury will face some economic challenges before the situation improves, according to a recent report from a national think tank.

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The Conference Board of Canada said the combination of “a lukewarm national economy and uneven commodity prices” has not helped Nickel City, which relies heavily on its mining sector.

The value of its iconic metal had skyrocketed a few years ago, but by this summer it had fallen to about half its value.

“Product cancellations by manufacturers of electric cars, which run on batteries using nickel, combined with a continued boom in Indonesian production, have driven down nickel prices,” the council said. “Unsurprisingly, Greater Sudbury’s economy is struggling.

The city’s gross domestic product is still below its pre-pandemic peak, the council said, and a further contraction of 0.3% is expected this year.

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The local job market has also struggled. “Employment is still below its 2019 peak and will decline by almost 3 percent this year, pushing the unemployment rate to a three-year high of 5.6 percent,” the report said.

Things are, however, expected to improve somewhat in 2025, with GDP growth of 1.7 percent and continued growth of almost 2 percent over the period 2026-28, the report said. “The city’s production will finally return in 2026 to its level before the 2019 pandemic,” the CBoC said.

Despite what may seem like a lot of construction going on in the city – including the massive project taking shape on the hill overlooking Brady Street – the city is still struggling to meet its housing demand.

“Increasing immigration pushed Greater Sudbury’s population growth to a record 3 per cent last year,” the report notes. “As elsewhere, residential construction is having difficulty delivering the housing we need. The ratio between housing starts and population growth in the region reached its lowest level in nine years in 2023 and will hardly change this year.

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Despite three straight years of job growth, including a 1.7 per cent gain in 2023, employment in Sudbury is still below its 2019 level of 87,300 workers, according to the outlook. Employment actually fell 2.9 percent this year, but the council expects an equivalent rebound next year to erase that setback.

Looking ahead, “we expect modest but steady employment growth of close to 1% per year in 2026-2028,” the CBoC said.

Service industries will bear the brunt of this year’s job losses, the board said, while goods-sector employment “will be undermined by the loss of 850 construction jobs and nearly of 300 positions in the primary sector and public services.

These difficulties will, however, be partially offset by a gain of 560 people in manufacturing employment, and employment in goods and services will increase next year, according to the report.

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“The decline in employment this year will bring the unemployment rate to an average of 5.6 percent, compared to 4.9 percent in 2023,” the report said.

This should improve over the next few years, but just barely. “Increased employment in 2025 and 2026 will bring the rate down to 5.5 percent and 5.4 percent respectively,” the board said.

Although Sudbury miners have been weakened by the increased supply of nickel from Indonesia and China, the board said this surplus “should eventually be absorbed, with the price of nickel expected to increase slightly over the course of the year.” of the next few years.”

Meanwhile, Vale continues its $200 million recovery efforts for the historic Stobie mine, which is “expected to create 60 to 80 jobs over the four years of the project.”

Weak nickel markets have reduced Sudbury’s primary and utility sector output by 1.6 per cent in 2023 and “will limit the sector to fractional growth in 2024,” the report predicts.

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The future, however, looks better, “because the rise in nickel prices will help increase industrial production by 1.7 percent in 2025.”

Sudbury’s small manufacturing sector contracted by 10.1 per cent during the 2020 pandemic year, the council said, and has yet to return to its pre-pandemic size.

There are, however, some reasons to expect growth in this area, including Wyloo Canada’s plan to build a plant in Sudbury to process ore from the Ring of Fire.

“The plant is initially expected to produce enough materials for approximately 250,000 electric vehicles per year and could triple that production with nickel from other producers,” the Conference Board said.

The local manufacturing industry will contract by almost one percent before the end of this year, but will grow by 2.9 percent in 2025 and the same in 2026, according to the outlook.

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Meanwhile, retail sales in Sudbury will likely have declined 1.5 per cent by the end of the year, but are expected to rebound 3 per cent next year and post similar annual growth thereafter, the council said.

Net migration to Sudbury reached a record of almost 5,400 people in 2023, the report says, and intercity migration has also been strong, averaging 673 people per year in 2021-23.

Total net migration will slow over the coming years, the council predicts, as international arrivals decline, but will remain high, at an average close to 1,100 people over the period 2025-2028.

“Local numbers will thus increase by 1.5 percent in 2024 and by 0.5 percent in 2025,” the report indicates. “Annual population gains will then slow and essentially stop in 2027-2028. »

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The board describes the city’s real estate market as being in a “steady state,” although “it is tightening as apartment sales face declining listings.” Transactions have fallen from high pandemic-era volumes but continue to hover near their two-decade average.

The average resale price in Sudbury is on track to increase by about 3 per cent this year, the commission said, following an equivalent decline in 2023.

“Lower interest rates are expected to maintain balanced conditions in this market and moderate price growth for the remainder of this year and into 2025,” the board said.

However, the stable residential market has “reduced output from the finance, insurance and real estate sector for three consecutive years,” the report notes. “A further output erosion of 0.8% is forecast for 2024, before fractional growth in 2025. Similar advances are forecast for 2026-2028. »

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The city is growing, but still struggles to accommodate its inhabitants. “Sudbury housing starts are on track to fall for the third year in a row after hitting a recent high of 434 units in 2021,” the CBoC said. “The 268 units started last year were well below the 20-year average of starts in Sudbury, which was almost 380 units. »

The decline “likely reflects the high interest rates builders face to finance their projects, as well as labor shortages and high material costs,” according to the report.

The council, however, expects housing starts to increase next year – by 300 units or more – as interest rates fall and the population continues to grow.

“Sudbury’s relative affordability will support continued demand for single-family units — an endangered species nationally,” the council predicted. “We think about 40 percent of housing starts will be singles in 2025-2028, compared to less than 25 percent nationally.”

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The economic think tank highlighted several major projects underway locally, including the city’s plan for a downtown arena, with construction expected to be completed by spring 2028. It also highlighted the project multi-tower residential project envisaged for the former hospital site. on Paris Street and a Sandman project to create a hotel on the footprint of the former Ambassador Hotel on the Kingsway.

“In total, we expect Sudbury’s construction output to decline by 1.1 percent in 2024 after a two-year contraction, including 3.3 percent in 2023,” the report said.

But according to the outlook, this trend will increase in the following years.

“The industry is expected to grow 3.9 percent in 2025 and 4.9 percent in 2026 as various projects accelerate and construction starts increase,” the board said.

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