Ottawa, August 22, 2018—Apart from Greater Sudbury and St. Catharines–Niagara, Ontario’s medium-sized metropolitan areas can expect economic growth to moderate this year, according to The Conference Board of Canada’s latest Metropolitan Outlook. Still, Oshawa and Guelph are expected to boast the fastest growing economies among the 16 cities covered in the report, with growth of 2.6 per cent and 2.3 per cent respectively.
“In most Ontario metropolitan areas, economic growth is slowing in line with the national economy. Rising interest rates, newly implemented tariffs on Canadian exports, and stricter mortgage rules are limiting growth across a number of sectors,” said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada. “In fact, most Ontario cities covered in this report can expect to see their economies expand by less than 2 per cent this year.”
- Oshawa and Guelph are expected to boast the fastest growing economies this year among the 15 Canadian cities covered in the report.
- Most of Ontario’s medium-sized cities will see real GDP growth come in under 2 per cent this year.
- Rising interest rates, newly implemented tariffs on Canadian exports, and tougher mortgage rules are limiting growth across a number of sectors.
Oshawa’s economy is forecast to cool slightly with real GDP advancing 2.6 per cent in 2018, following 3.2 per cent gains in the last two years. Robust non-residential construction, together with output strength in wholesale trade, education, health care, and finance, insurance, and real estate will more than offset the fourth annual contraction in manufacturing this year.
Guelph is poised to see continued, albeit moderating, economic growth of 2.3 per cent in 2018, after a 3.1 per cent gain last year. The city’s manufacturing sector will continue to benefit from a below par Canadian dollar and solid demand from the United States. Guelph’s trade sector saw an impressive 7.3 per cent output gain in 2017, but a more sustainable 2.7 per cent expansion is in the cards this year.
Windsor’s economic growth exceeded 3.0 per cent in every year between 2014 and 2017. But that streak is expected to end this year. Local economic growth is slowing in tandem with U.S. light vehicle sales and is expected to reach 2.0 per cent in 2018. Higher interest rates and tougher mortgage rules are also putting a damper on the metro area’s previously hot housing market.
After posting a strong gain of 3.0 per cent last year, Kingston’s economic growth will moderate to 1.9 per cent in 2018. The public sector—the city’s biggest economic driver—is forecast to experience cooler growth over the near term. The slowdown will not be confined to public sector, as wholesale and retail trade, construction, and manufacturing are also expected to see growth decelerate.
London’s real GDP is set to rise 1.9 per cent in 2018 furthering a string of economic gains going back to the end of the 2009 recession. While overall services growth is set to ease this year, two key industries in London—education and health care—are set to post solid advances of 2.1 per cent and 3.1 per cent, respectively. At the same time, although retail trade output growth is on track to decelerate sharply, this year’s projected gain of 2.3 per cent is consistent with the industry’s historical average annual growth.
Kitchener–Cambridge–Waterloo’s economy is poised to expand by 1.6 per cent in 2018. The area’s economy remains diverse and broad-based, but strength in manufacturing and the services sector will lead the charge. The finance, insurance and real estate industry has slowed due to housing market cooling measures and growth hit a post-recession low of 1.3 per cent last year. Transactions are expected to edge higher later in the year and the industry should see a slight rebound in output growth at 1.9 per cent.
The Greater Sudbury economy will continue its recovery and expand by 1.2 per cent this year, on the heels of a 0.5 per cent increase in 2017. A decent outlook for nickel is fostering hope for the primary and utilities sector which is set to expand 1.6 per cent in 2018 following four straight annual contractions.
Another year of moderate economic expansion is in store for Thunder Bay, with real GDP slated to slow slightly to 1.2 per cent from 1.3 per cent last year. Manufacturing output growth continues to inch higher this year, mirroring last year’s advance. Meanwhile, a weakening housing market is expected to be partly responsible for limiting growth on the services side of the economy this year.
St. Catharine’s–Niagara’s economy will continue to grow at a moderate but steady pace over the next two years, with real GDP forecast to expand by 1.2 per cent in 2018 and 1.4 per cent in 2019. Decent non-residential activity will offset declining new home construction, allowing the overall construction sector to grow at a healthy rate this year.
Released today, Metropolitan Outlook: Summer 2018, is The Conference Board of Canada’s annual analysis of 16 Canadian census metropolitan areas.