2001 Credit Rating for Essex County

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Expansion in the local economy in 1999 and 2000 was led primarily by two sectors: manufacturing and agriculture. The county and the City of Windsor are home to a world-class cluster of auto pads manufacturers and vehicle assembly operations. The Windsor-Essex area has benefited greatly in recent years from buoyant conditions in the auto sector and C$7 billion of capital investment has poured into the area since 1994. Essex's agricultural sector also has prospered. The county has been historically a center for the production of field crops, and, recently, it has become known for the production of fruit and vegetables, especially those grown under glass. Essex is now home to the second-largest concentration of greenhouses in North America. Recent trends in employment, unemployment rates, and building permit values all indicate an expanding local economy. Led by the construction and auto sectors, total employment in the Essex-Chatham-Kent-Lambton economic region increased 3.2% in 2000, following a 3.3% rise in 1999. The unemployment rate in the region responded, falling to 6.1% in 2000, down from 6.4% in 1999 and 8.2% in 1998. In contrast, the average unemployment rate for the Province of Ontario was 5.7% in 2000, an 11 -year provincial Iow. Essex's building permit values increased in 1999, rising more than 11% from the previous year. Building permit values rose 54% in 1995-1999. Lured by increased employment oppodunities, a largely rural setting, and easy access to major American markets, people and businesses have been moving in recent years to Essex. Recent population and assessment growth has outpaced that of almost all Ontario municipalities. The county estimates that its population grew at an average annual rate of more than 3% in 1996- 2000. The taxable assessment growth rate is estimated to have been around 3% during the same five-year period. The pace of local economic activity and taxable assessment growth should moderate this year. In fact, the effects of the North American auto sector slowdown have begun to be felt in the county, with some local pads manufacturers reducing production in the face of weaker demand. Nevertheless, various on-going construction projects and plant expansions will continue in 2001, boosting output and employment and somewhat mitigating the effects of the auto sector slowdown. As well, long-term investments in the local economy continue to be made. Municipal governments, the province, and industry will fund capital initiatives for regional hospitals and post- secondary education facilities, totaling in excess of C$158 million in the next five years. Table 1 County of Essex Economic Statistics --Year ended Dec. 31 -- (% change) 2000 1999 1998 1997 1996 Population 0.2 2.9 0.2 12.9 Employment* 3.2 3.3 3.8 (1.2) Unemployment rate (%)* 6.1 6.4 8.2 8.8 9.5 Building permit values 11.3 (3.3) 26.9 12.8 Taxable assessment basel] 2.6 3.8 (2.0) 3.8 2.8 *Data for the Essex Chatham Kent Lambton economic region, l]The methodology used to calculate assessment was changed in 1998 and the old and new bases are incomparable. Municipal Organization Essex is an upper-tier local government comprising seven lower-tier local Page 2 of 6