Under Development: Our Economy will be updated with full 2017 and 2018 data in Q1 2019 in Open Data format
The Our Economy section includes information that tells us how Hamilton’s economy is performing. This information is compiled from Statistics Canada, Hamilton Census Metropolitan Area (CMA), REALTORS Association of Hamilton-Burlington, and the Conference Board of Canada.
One of the most commonly used sources of information to obtain a basic measure of the health of an economy is the unemployment rate. The unemployment rate identifies the percentage of the labour force (those people who are employed or are actively seeking employment) that are unemployed. Both businesses and citizens look to this measure among others to understand employment demand and opportunity for the designated area, with a lower unemployment rate normally signalling a job market favouring the job seeker, and a higher unemployment rate normally signalling a job market favouring the employer.
- The past five years of unemployment data shows a downward trend on the unemployment rate, indicating that a larger percentage of the population actively involved in the labour force have been successful in finding and maintaining employment.
- Provincially, Hamilton has consistently outperformed the provincial average over the past five years.
- Nationally, Hamilton has one of the lowest unemployment rates compared to all major urban areas.
Annual Real Estate Sales
The measurement and reporting of residential real estate transactions is a common and valuable source of information on the general health of an economy. A large and growing number of residential real estate transactions indicate a healthy market for what is for most Canadians their largest asset, and a demonstration of a stable equilibrium in the general perceptions of buyers and sellers. Real estate professionals as well as current and prospective citizens look at statistics on real estate sales volumes in addition to current real estate inventories, historic and recent transaction values to understand and forecast supply/demand, and establish market pricing for future transactions.
- There has been a consistent increase in the annual real estate sales in Hamilton over the past five years, reaching a record high total in 2016.
- The annual sales total for 2017 is trending lower in 2017 (as of August).
Annual Housing Starts
As the population of Hamilton continues to grow, it is forecasted that there will be a steady increase in demand for dwellings to accommodate that growing population. The collection and analysis of housing starts data provides insight into the ability of Hamilton to accommodate that forecasted population growth, and the demand for new houses by current and future citizens.
- There have been material fluctuations in annual housing starts over the past five years. This fluctuating trend is reflective of a complex sector. Factors affecting housing starts include availability of shovel ready lands, and demand and absorption for housing in the existing urban areas.
Average Market Rent
The Average Market Rent (AMR) is the price a landlord might reasonably expect to receive and a tenant might reasonably expect to pay for a monthly tenancy in a given locality. It factors-in rents for comparable tenancies and is a measure of the price of housing.
In 2017, the AMR in Hamilton was $943 and is increasing at a fast pace. At an average rate of increase of 4.1 percent per year, escalating rents have outpaced inflation and relatively modest growth in household income. This has resulted in many households experiencing housing affordability challenges.
Some areas of the city have seen rents increase at faster rates than others. For example, East Hamilton has seen rents increase by an average of 6.6 percent per year bringing the AMR up from $724/.mo. in 2012 to $1009/mo. in 2017. These trends mean the average renter East Hamilton household is paying $285 per month more on rent than they were 5 years ago.
Annual Estimated Building Permit Values
The measurement of the annual estimated construction values of permits issued in Hamilton provides a high level overview of the investment occurring in the city. Individuals and organizations making long-term financial commitments in new buildings, additions and major renovations indicate their confidence in long term outlook of Hamilton and the economy.
- The City of Hamilton has seen five consecutive years of annual estimated building permit values above $1 billion, with the highest annual total occurring in 2012.
- There has been a slight downward trend in the annual total experienced over the past three years, however this trend has reversed in 2017, which is on pace to reach a new five year high.
- As of October 5, 2017 the City surpassed $1 billion of annual estimated building permit values for the year. Hamilton is one of the leading Ontario cities to hit the billion dollar mark this year. October 5th also marks the earliest point in a year that the City hit this significant milestone.
Annual Estimated Building Permit Values by Type
While the total estimated annual building permit figures provide a great high level overview, visibility into how each major building permit category contributes into the totals provides insights into how these developments might impact employment, economic activity and assessment revenues in the future.
- Residential building permits consistently represent the largest percentage of the annual estimated building permit values in Hamilton, driven by the large demand for residential real estate.
- There has been a noted decline in the annual estimated values of industrial and commercial building permits, associated in part to a shortage of shovel ready industrial zoned land and an adequate supply of commercial real estate. The City of Hamilton’s recently approved 2016-2020 Economic Development Action Plan has placed a focus on stimulating growth in these two types of developments.
- Large government or institutional projects can have a large impact over the short term, as seen in 2012, where the estimated Government/Institutional building permit values of over $400 million (which is more than four times the average compared to the following years) significantly contributed to a record year for estimated building permit values.
Employment by Sector
Hamilton is the largest part of the Hamilton Census Metropolitan Area (CMA) which is home to thousands of diverse businesses and organizations that employ over 350,000 people. While these businesses and organizations can have wide ranging product and service offerings, they have been categorized by Statistics Canada into a number of sectors. The above graph further aggregates the sectors provided by Statistics Canada into ten main sectors, to provide quick visibility into areas where employment is occurring in the Hamilton CMA.
- In the Hamilton CMA, the largest employment sector is Education and Healthcare, which represents over 86,000 employees. In Hamilton, the largest employers from this sector include Hamilton Health Sciences, McMaster University and Mohawk College.
- The Manufacturing sector is still a large contributor of employment opportunities representing approximately one in every nine jobs in the Hamilton CMA.
- The Hospitality and Entertainment sector is a fast growing area for employment growth; as arts, culture and tourism focused businesses continue to grow in numbers and size in the Hamilton area.
Business Count by Size Category in Hamilton
The economic prosperity of a city is tied to both the economic prosperity of the businesses that locate and invest there. Cities need to foster an environment that encourages entrepreneurs to start small businesses, accommodate the growth and attraction of small and medium size businesses and to retain large companies. Information is collected and disseminated by Statistics Canada which provides a detailed breakdown of the amount of businesses located in Hamilton, segmented by employment ranges, which provides a high level annual overview that can allow year-over-year comparisons, and comparisons between different cities.
Business Count by Size Category Chart Data
|No. of Employees||1 - 4||5 - 9||10 - 19||20 - 49||50 - 99||100 - 199||200 - 499||500 +||Total|
|Data source: Statistics Canada. Canadian Business Patterns database|
The economic prosperity of a city is tied to the economic prosperity of the businesses that locate and invest there. Cities need to foster an environment that encourages entrepreneurs to start small businesses and also accommodate the growth, attraction and retention of existing small and medium size businesses.
- Cities also need to demonstrate and communicate that they are suitable places for large businesses to grow and thrive, and to be active in the marketing of its many advantages and pursuit of international opportunities to attract and retain large companies.
- Information is collected and disseminated by Statistics Canada which provides a detailed breakdown of the amount of businesses located in Hamilton, segmented by employment ranges, which provides a high level annual overview that can allow year-over-year comparisons, and comparisons between different cities.
- Hamilton has seen consistent business growth in the total number of businesses over the past seven years, with over 1,600 new businesses added to this cumulative total over that period.
- It is encouraging to see the improvements are also represented in each individual business size category, demonstrating Hamilton’s ability to foster a start-up and scale-up environment that has seen new business entries and growth in the number of 100-199, 200-499, and 500+ employee companies.
- The City of Hamilton actively supports small businesses. The Hamilton Small Business Enterprise Centre provides the information and tools that entrepreneurs need to grow their businesses. The Centre is a one-stop source for business information, guidance and professional advice on starting and running a successful business. Learn more about the Small Business Enterprise Centre
Over the past 50 years, Hamilton has emerged from the perception of it being a “Steel City” to happily embracing the label of having a highly diversified economy that is not as heavily reliant upon any one industry in the future, and is able to accommodate a wide variety of businesses due to our competitive advantages. The Conference Board of Canada provides a measure of a metropolitan area’s Economic Diversity based on the structure of its economy as compared to a national average. The range provided by the Conference Board to help derive meaning from their scoring is a “Highly diverse” economy is said to have a score of 1, while an economy that is “Not diverse” has a score of 0.
- With a score in the low to mid-nineties over the past six years, the Hamilton CMA is seen to have a highly diversified economy.
- In 2013, Hamilton was identified by the Conference Board of Canada as having the “Most diverse economy in Canada” with a score of 0.94.
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