Major City Insights: Kitchener–Cambridge–Waterloo—July 2022

The Conference Board of Canada, July 21, 2022
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Although the threat of COVID-19 is far from over, the economies of most major cities across Canada are back on track and weathering the storm of soaring inflation, rising interest rates, and—in many cities—cooling housing markets. Employment will keep growing this year, particularly in sectors of the economy hardest hit by the pandemic.

This edition of our Major City Insights provides new forecasts for growth in 11 major cities in Canada as of June 9, 2022.

This publication focuses on the Kitchener–Cambridge–Waterloo metropolitan economy.

Document Highlights

  • Kitchener–Cambridge–Waterloo’s diverse economy is reasonably well equipped to confront Canada’s challenges, including rising interest rates, high inflation, and a cooling housing market.
  • The area’s economy had reached pre-pandemic levels by the end of last year. We therefore expect local GDP growth to ease from 4.9 per cent in 2021 to 3.9 per cent this year and 3.6 per cent in 2023.
  • The area’s unemployment rate peaked at a nasty record of 12 per cent in the second quarter of 2020 but fell steadily to 5.5 per cent by the end of last year. We expect further unemployment rate drops this year and next.
  • As elsewhere in Canada, there is a significant risk of a severe housing market correction, although this is not our baseline forecast. Still, even the modest market downshift we envision will be economically bracing, to say the least.

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