Ottawa, February 14, 2013—Toronto is expected to have the fastest-growing economy outside of western Canada, both in 2013 and over the next four years. It is a much different story in Ottawa-Gatineau, where federal spending restraint will leave the national capital economy with one of the slowest rates of growth in the country, according to The Conference Board of Canada’s Metropolitan Outlook- Winter 2013.
“The economic recovery in the United States, although slow, will help boost exports coming from Ontario’s cities this year. U.S. demand for motor vehicles is especially strong, which will lead to production increases at automobile and parts factories across the province,” said Mario Lefebvre, Director, Centre for Municipal Studies.
Nationally, Saskatoon and Regina will generate the strongest growth among the 28 CMAs covered in this outlook, followed by Calgary, Edmonton and Vancouver.
Toronto will regain its place as the fastest growing economy in Ontario in 2013. In addition to improved prospects in manufacturing, a faster rate of job creation will also benefit the domestic economy. After posting growth of less than two per cent in 2012, Toronto’s real gross domestic product (GDP) is forecast to grow by 2.8 per cent this year, and by an average of 2.7 per cent annually from 2014 to 2017.
At the other end of the spectrum, Ottawa-Gatineau’s economy is suffering from downsizing in the federal government, the region’s largest employer. Public sector employment is expected to fall for the next three years – including a 3.8 per cent decline this year. Other sectors, such as the housing market, are forecast to feel the pinch of public sector job cuts. On the upside, the region’s manufacturing sector – centred in information and communications technology – is forecast to expand in 2013. Nevertheless, real GDP growth will be limited to only 1.3 per cent this year.
Prospects are bright in Kitchener-Cambridge-Waterloo. Employment is expected to grow by 2.5 per cent in 2013, bringing the CMA’s unemployment rate to a five-year low. After three consecutive years in which real GDP growth averaged 4.5 per cent, a reduced pace of growth in manufacturing will slow economic growth to a still-healthy 2.7 per cent in 2013. The manufacturing outlook will be affected by the performance of Blackberry (formerly known as Research in Motion), and its Blackberry 10 product.
Oshawa’s manufacturing sector will grow for the fourth consecutive year in 2013, due in large part to increased U.S. demand for motor vehicles. As a result, the Oshawa economy is forecast to grow by 2.6 per cent in 2013.
After several difficult years, there is cautious optimism about Windsor’s economy. Ongoing work on the Herb Gray Parkway will boost the construction sector, and the CMA’s vital manufacturing sector is expected to grow for the fourth consecutive year due to a continued rise in U.S. vehicle demand. All in all, the Windsor economy is expected to grow by 2.4 per cent in 2013.
Hamilton’s economy is forecast to grow by 2.3 per cent in 2013, and a similar annual rate of growth is forecast in subsequent years. The manufacturing sector has diversified of late. For example, Maple Leaf is building a new food processing plant, which will increase the importance of food manufacturing in Hamilton’s economy.
Real GDP in London is expected to grow by 1.9 per cent in 2013, a modest improvement over the 2012 growth rate of 1.2 per cent. Growth has been so modest that employment remains below its pre-recession peak. Over the next four years, the London economy will continue to post economic growth below its pre-recession average.
Thunder Bay is expected to post its fourth consecutive year of positive economic growth in 2013 – the first time that has happened since the 1997-2000 period. The manufacturing and construction sectors will drive real GDP growth of 1.8 per cent in 2013. Thunder Bay’s population is forecast to continue its modest growth of recent years, which is good news for housing starts.
Increased stability in the world economy is expected to boost growth in the mining industry, which is crucial for Sudbury. As a result, the Conference Board expects 1.8 per cent real GDP growth in this area in 2013. The scheduled completion of Sudbury’s first new mine in 40 years is an indication of the improved outlook for the primary and utilities sector. Employment is expected to grow by 2.9 per cent this year, supporting growth in the services sector of the economy.
Government spending restraint in programs such as health care and education are having a disproportionately-large effect on Kingston’s service-oriented economy. As a result, the Kingston economy will grow by 1.7 per cent this year and at a similar pace on average in each year between 2014 and 2017.
Coming off employment growth of 2.9 per cent in 2012 – the best labour market gains in 12 years – and real GDP growth of 2.3 per cent, the economy of St. Catharines-Niagara will expand at a more modest pace of 1.4 per cent this year. The CMA’s population will grow slowly in the years to come, which will limit domestic demand and, in turn, overall real GDP growth. In fact, economic growth is expected to average only 1.4 per cent annually through 2017.