News Releases 09-91

Five Canadian Cities To Post Positive Growth In 2009

Ottawa, March 31 — Saskatoon, Regina and Winnipeg will again set the pace this year in economic growth among the 13 Canadian Census Metropolitan Areas (CMAs) covered in the Conference Board’s Metropolitan Outlook – Spring 2009. The three prairie cities, along with Quebec City and Ottawa-Gatineau, are the only CMAs in this edition of the Metropolitan Outlook that are expected to post economic growth this year.

“Saskatoon and Regina will not match their spectacular 2008 growth rates, but they have enough economic momentum to top all other CMAs again this year. While less heralded than its prairie neighbors, Winnipeg is quietly posting solid growth,” said Alan Arcand, Principal Economist. “At the other end of the spectrum, Toronto and Hamilton will trail all other CMAs in this outlook for the second consecutive year, reflecting the depth of the manufacturing downturn.”

After growing by a stunning seven per cent last year, Saskatoon’s economy will increase by 1.7 per cent in 2009. Regina’s economy, which grew by 5.3 per cent in 2008, will expand by a further 1.6 per cent in 2009. Strong in-migration into both CMAs will continue to support residential construction activity and demand for services.

Winnipeg’s economy is expected to grow by 1.1 per cent this year. Employment has risen for three consecutive years and sound labour markets have lured newcomers into the community.

A strong government presence and historically-high levels of investment in public infrastructure will keep Quebec City’s economy out of recession. Real gross domestic product (GDP) is expected to grow, albeit moderately, by 0.6 per cent in 2009. Montreal’s manufacturing sector is significantly affected by the global downturn. As a result, Montreal’s real GDP is forecast to decline by 0.5 per cent, the CMA’s worst performance since 1991.

Ottawa–Gatineau’s economy is forecast to expand by just 0.2 per cent, its weakest growth rate since 1996. While the high-technology sector is battered by the global uncertainty, the public administration sector will provide enough of an offset to keep the economy from shrinking this year.

Toronto’s real GDP is forecast to contract by 1.6 per cent in 2009. Output in the export-dependent manufacturing sector will fall for the fourth consecutive year. But the decline in activity will be fairly widespread this year, with output in both construction and the services sector expected to contract.

Hamilton’s economy declined by 1.6 per cent in 2008. Another decline of 1.9 per cent is forecast in 2009, as the CMA’s struggling manufacturing industry will be joined by weakness in most other sectors.

Calgary’s economy will shrink for the first time in 20 years, although real GDP is forecast to fall by just 0.1 per cent. The oil patch is struggling due to low prices and weak demand. Furthermore, retail sales are expected to decline for the first time since 1991.

Edmonton will also suffer from the downturn in the energy sector, leading to negative effects on employment, income, in-migration and housing starts. Real GDP is forecast to fall by 0.2 per cent this year.

Vancouver’s economy is expected to decline by 0.9 per cent, its first contraction since tracking of metropolitan economies began in 1987. In the construction sector, Olympic preparations are winding down and the housing market is slumping. Furthermore, export-oriented sectors continue to be battered by the decline in foreign demand, particularly from the United States.

The services sector in Victoria is suffering from a reduction in the number of visitors and a decline in consumer spending. This, combined with tumbling residential construction activity, will lead to a 0.3 per cent decline in real GDP this year.

Halifax’s economy will post no growth in 2009. While output in both the manufacturing and construction sectors is anticipated to fall, the services sector will find a way to grow just enough to offset those declines.