In 2001, the technology sector saw a downturn both in terms of employment and contribution to Ottawa's economy. Over the last year, however, advanced technology has shown signs of renewed growth. Overall, employment in Ottawa increased substantially in the first six months of 2006, and the local unemployment rate is at a low 4.8%, buoyed in part by a surge in non-residential construction.

The federal government has seen sustained growth since 2001. As a result, the Ottawa economy has continued to grow since then and employment has remained stable. However, government hiring has slowed since the election of a new federal government in 2006.

The City of Ottawa also benefits from a vital rural sector. In Ottawa, the rural economy contributes over $1 billion to the GDP. Agriculture alone accounts for $400 million, $136.7 million of which is farm-gate sales. Rural economic activity includes such things as agriculture, retail sales, construction, forestry and mining (aggregates), tourism, manufacturing, personal and business services, and transportation, to name a few. Rural employment expanded by a healthy 18% from 1996 to 2001.

The Ottawa agricultural sector represents close to 300,000 acres of land farmed by more than 1,300 agricultural operations, employing approximately 10,000 people. Responsible, sustainable farming practices contribute to maintaining the value of Ottawa's countryside. Agriculture not only complements and affects the prosperity of other sectors such as rural tourism, but it also helps preserve the quality of rural Ottawa as a place to live and work.

Ottawa's GDP growth remained stable at 2.4% in 2005. The Conference Board of Canada's February 2006 forecast predicts that Ottawa's GDP growth will increase to 2.8% in 2006 and average 3.2% annual growth over the coming four years.

GDP, Ottawa-Gatineau CMA

In its forecast, the Conference Board also examined the diversity of the city's economic base. As previously stated, the technology and federal government sectors account for 37% of total Ottawa GDP (see table below). This level of concentration means Ottawa relies heavily on these two sectors as the main drivers of its economy. Ottawa does not experience the same level of economic fluctuations seen in other municipalities because the federal government sector has been remarkably stable over the years and government employment does not tend to vary with economic cycles.

It is important to note that the reliability of the Conference Board's forecast hinges on growth in at least one of these two key sectors.

Source: Conference Board of Canada, Metropolitan Outlook

CIBC's Metro Monitor reports on the rate of change in the level of economic activity among Canada's largest metro areas. The June 2006 index, which covers the first quarter of 2006, showed that the Ottawa-Gatineau economy registered the highest reading among all metro areas. The Metro Monitor notes that this ranking reflects a relatively diverse performance with the city's labour market clearly outperforming the national average from both quantity and quality perspectives.

In the first quarter of 2006, the Ottawa-Gatineau economy performed consistently well above average in most of the important indicators such as government, building construction, employment, and lower rates of business and consumer bankruptcies. The Metro Monitor also noted that the surge in high-tech activity is probably playing an important role in the city's impressive showing. There is a slight drag, however, on overall economic performance due to a slowing of the housing market.

Top 10 metro economies* (2006Q1)

Ottawa annual inflation

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