Saskatoon and Regina will be the fastest growing metropolitan economies in the country this year.
Ottawa, February 14, 2013—Saskatoon and Regina will be the fastest growing metropolitan economies in the country this year. Calgary and Edmonton are also forecast to have some of the strongest growth rates in the country, but neither are “booming” like they were prior to the 2008-09 recession.
Released today, The Conference Board of Canada’s Metropolitan Outlook-Winter 2013, is the Board’s forecast for 28 Canadian census metropolitan areas (CMA).
A thriving job market is attracting newcomers in droves to Saskatoon, which helps everything in the economy from housing starts to retail trade. The Saskatoon CMA’s real gross domestic product (GDP) is expected to grow by 3.7 per cent this year, number one in the country, and is expected to have the strongest growth rate over the 2014-2017 period as well.
Regina’s economy is slowing by its own recent standards, from real GDP growth of 4.2 per cent in 2012 to 3.5 per cent in 2013, but growth remains robust. The Regina CMA is effectively at full employment, but jobs continue to be created – employment is expected to grow by 3.5 per cent this year. Regina’s population has grown by about two per cent for four straight years, providing support to the area`s services-producing industries and housing market.
“Both Regina and Saskatoon attracted record numbers of newcomers in 2012. Migration is arguably one of the greatest success stories for these cities, with more and more Canadians choosing to call them home,” said Mario Lefebvre, Director, Centre for Municipal Studies.
Real GDP in Calgary grew by 3.3 per cent in 2012, and is forecast to grow at a similar pace in 2013. Calgary continues to benefit from its role as services hub for Alberta’s growing energy industry. There is, however, a heightened risk of slower growth in the outlook, as a result of the unusual amount of uncertainty in the energy sector. The “bitumen bubble” (price discount between Alberta’s oil and world prices), along with lower natural gas prices, pose downside risks to the forecast.
Edmonton led the country in real GDP growth in both 2011 and 2012, at 6.6 per cent and 4.4 per cent, respectively. However, growth is forecast to moderate starting in 2013, when it is projected to reach 3.2 per cent. In addition, if pipelines are not built to meet rising oil sands production, Edmonton’s medium-term outlook could be trimmed.
Vancouver's economic growth is expected to accelerate slightly from 2.5 per cent last year to 2.9 per cent in 2013. The medium term outlook sees growth averaging three per cent annually through 2016. The CMA’s housing market is slightly overbuilt at present, which will slow residential construction in 2013 and 2104.
Employment in the Abbotsford-Mission CMA grew by 5.3 per cent in 2012, its biggest jump in 10 years. Although job growth will slow in 2013, real GDP will grow by 2.7 per cent in both 2013 and 2014, a slight acceleration over the 2.4 per cent average growth recorded over the previous two years. Signs of life in the U.S. housing market will boost the outlook for the area`s wood products manufacturing sector.
Still in the west, Winnipeg's economy will be held to two per cent growth in 2013. Growth in the manufacturing sector – thanks to higher demand for bus transportation – and an improving services sector will be partly offset by a weaker construction outlook.
Outside of western Canada, Toronto is expected to have the fastest-growing economy in 2013 (at 2.8 per cent), and over the next four years (2.7 per cent per year on average from 2014 to 2017). Toronto economic growth fell below two per cent in 2012, but improvement in the U.S. economy should help its manufacturing sector in 2013. A faster rate of job creation will also benefit the domestic economy.
Kitchener-Cambridge-Waterloo and Oshawa are expected to post economic growth of 2.7 per cent and 2.6 per cent respectively, this year. Moncton is forecast to boast the strongest growth rate in Atlantic Canada at 2.5 per cent, followed closely by Halifax and St. John’s.
Reductions in public sector employment are limiting economic growth in cities that serve as capitals, notably Victoria and Ottawa-Gatineau. Both CMAs grew by just 0.9 per cent apiece in 2012 and the outlook is only slightly stronger for 2013.
Victoria's economy is forecast to expand by 1.8 per cent, as public sector employment is forecast to decline for the third consecutive year. The area’s soggy job market is trimming population growth, which, in turn, is curtailing housing demand.
Ottawa-Gatineau's economy is feeling the pinch of downsizing in the federal government, the region’s largest employer. Public sector employment is expected to fall over the next three years – including a 3.8 per cent decline this year. Accordingly, Ottawa’s real GDP growth is forecast to come in at 1.3 per cent in 2013 – 26th out of 28 CMAs.
Quebec City is expected to lead the five CMAs located in Quebec with economic growth of 2.1 per cent in 2013. The construction of a new NHL-sized arena is providing a boost to the economy. Elsewhere in Quebec a slight malaise seems to be permeating Montreal's economy. After real GDP growth of just 0.8 per cent in 2012, Montreal’s economy is expected to expand by 1.7 per cent. Trois-Rivieres is the only Canadian CMA whose economy is expected to contract this year, in part because of the recent announcement to close the Gentilly 2 nuclear power plant.