How is your town doing? Medium-sized metropolitan economies expect to see modest improvement in 2015
Ottawa – The economies of most medium-sized metropolitan areas in Canada will continue to improve at a modest pace this year, according to The Conference Board of Canada’s Metropolitan Outlook: Summer 2015.
“The economic recovery in many of Canada’s medium-sized metropolitan areas has been slow since the 2008-09 recession ended,” said Alan Arcand, associate director, Centre for Municipal Studies, The Conference Board of Canada. “Although activity is improving, as both a weaker Canadian dollar and a solid US economy foster a gradual recovery in manufacturing, economic growth will remain modest and downside risks persist.”
Among the 15 cities covered in the report, Kitchener-Cambridge-Waterloo, Abbotsford-Mission and Moncton are expected to boast the fastest growing economies this year, while the economy of St. John’s is expected to post the weakest growth.
Mixed outlook for Atlantic cities
Moncton’s real GDP is forecast to rise by a 10-year high of 3% this year thanks to healthy gains in manufacturing and the broader services sector. The solid economy will translate into decent job and income gains, which should encourage consumers to continue spending.
A recovery in manufacturing and in resources and utilities will help the economy of Saint John expand by 2.3% this year. Both sectors will benefit from a weaker Canadian dollar and stronger housing demand south of the border, the latter of which will help drive growth in the region’s forestry industry.
St. John’s economy will struggle under the weight of lower oil prices and falling offshore oil production in Newfoundland and Labrador as existing fields mature. Still, things will be better than last year when total output fell by 2.3%. This year, the St. John’s economy is forecast to grow by 0.5%, as solid gains in manufacturing, in wholesale and retail trade, and in finance and real estate offset declines in resources and utilities, and in construction.
Manufacturing recovery boosting economies of Ontario, Quebec and British Columbia cities
Work on a light-rail transit system and ongoing manufacturing strength will contribute to a 3.4% real GDP increase in Kitchener–Cambridge–Waterloo this year, making it the fastest growing economy among the 15 CMAs covered in the report.
Oshawa’s outlook remains positive despite headwinds in the local auto industry. In particular, population growth remains solid, thanks to the relative affordability of local housing, which fuels strong activity in construction as well as in many services-producing industries. But with General Motors set to shift Camaro production to Michigan, manufacturing growth is expected to be modest at best. Nevertheless, real GDP is forecast to advance by 2.6% in 2015.
London’s economy is forecast to expand by 2.1% this year, its fastest increase since 2005, thanks to stronger manufacturing and construction output. The improving economy bodes well for the local labour market outlook. Indeed, employment is also expected to increase by 2.1% in 2015.
Windsor’s auto sector is benefiting from rising vehicle sales in the US as well as in Canada, boosting local manufacturing output by 2.8%. This, combined with strong construction activity, will support real GDP growth of 2% in Windsor this year.
An improving services sector will help lift St. Catharines–Niagara’s economy by 1.8% this year. In particular, a weaker Canadian dollar should result in more cross-border trips by Americans, providing a lift to the region’s key tourism industry.
Kingston’s economy will grow by 1.1% in 2015 as strength in construction and in transportation and warehousing offset weakness in the public sector.
Thunder Bay’s GDP will grow by 0.7% in 2015, as activity at the city’s port and stronger construction output will help offset declines in resources and utilities, and in the public sector.
Soft nickel prices and shelving of the Ring of Fire mining project will limit Sudbury’s GDP growth to 0.7% in 2015.
Turning to the province of Quebec, Sherbrooke’s economy is set to improve in 2015, as strength in manufacturing and in business services will result in economic growth of 2.1% in this year.
Saguenay’s real GDP is expected to rise by 1.6% in 2015 as stronger services sector growth offsets a contraction in construction activity. Employment is expected to rebound this year, as almost 2,000 jobs will be added to the local economy.
A recovery in manufacturing and stronger services sector activity in Trois-Rivières will support a real GDP increase of 1.1% in 2015, the city’s first expansion in four years.
In British Columbia, Abbotsford-Mission’s economy is forecast to expand by a solid 3.2% this year. The local manufacturing sector in general and the wood products industry in particular are benefiting from growing demand from the US and a lower Canadian dollar.