Windsor

Total employment in Windsor rose by around 6,400 jobs last year, surpassing pre-pandemic (2019) levels. Most of the job growth came from the city’s manufacturing and education industries.

Our call is that employment will rise by 11,000 net new jobs in 2023, an increase of 6.3 per cent, with most of the job growth coming from the services sector. We think employment will rise by another 1,400 jobs in 2024, or 0.8 per cent.

The city has yet to feel the full impact of recent interest rate hikes. As higher interest rates work their way through the economy, both employment and economic growth will likely decelerate in 2024.

However, any downturn will be partly offset by the opening of the electric vehicle battery plant next year, which will help Windsor become a global leader in electric vehicle and parts manufacturing. The plant opening will also create many spin-off jobs in industries such as transportation and warehousing.

Continued work on the Gordie Howe bridge, along with the $50-million reconstruction of County Road 42, which is expected to take five to seven years to complete, will boost employment in the city’s construction industry.

We expect services sector job growth to decelerate next year but then pick up some steam through the rest of the forecast. Services sector jobs will continue to make up around 70 per cent of the metropolitan area’s labour force.

The city’s unemployment rate fell to 7.8 per cent last year. Strong job growth this year will push the unemployment rate down to an average of 6.6 per cent—the lowest rate since 2019.

Wages and salaries per employee rose 6.3 per cent last year, and we expect them to rise 2.6 per cent this year and 2.3 per cent in 2024.

Overall, we see Windsor’s unemployment rate falling to 6.5 per cent by 2027. The city’s labour market participation rate will remain stable at around 63.0 per cent throughout most of the forecast period.

Plenty of ongoing multi-million-dollar construction projects will boost output in Windsor’s construction industry this year. As a result, we expect real GDP in this industry will grow by 8.2 per cent in 2023.

But the city’s growth leader this year will be the arts, entertainment, and recreation industry, with output expanding by a staggering 16.9 per cent. Ever since pandemic-related restrictions were lifted, output in this industry has been on a sharp upward trend.

Output in the accommodation and food services industry has also increased dramatically over the last year. We expect this upward trend to carry over into 2023, with output rising by a stellar 7.5 per cent.

Beginning in 2024, the manufacturing industry will lead the charge in Windsor. We see industry output expanding by 4.3 per cent in 2024 and another 7.7 per cent in 2025. In fact, the manufacturing industry will be a growth leader throughout the rest of the forecast as electric vehicle production rises.  

Next year, as construction of the battery plant winds down and the housing market cools, we see real GDP in the construction sector falling by 2.1 per cent. However, we expect real GDP growth in this industry to pick up some steam toward the end of the forecast period.

Wholesale trade and the primary and utilities industry will benefit from greater manufacturing production. Output growth in these industries will be relatively strong over the next few years.

Windsor’s strengthened labour market, proximity to the U.S., and housing affordability relative to other southern Ontario census metropolitan areas, make it an attractive city to live in. Increased levels of net international migration have also brought more people to the region recently.

After rising 3.4 per cent in 2022, Windsor’s population will grow by 2.1 per cent this year and another 1.4 per cent in 2024. Between 2025 and 2027, we expect annual average population gains of 1.5 per cent.

Inflation continues to be a concern for Canadians. Year-over-year CPI growth in Windsor won’t fall back to the 2.0 per cent target until the fourth quarter of 2024.

As a result, the outlook for retail trade this year is dim, with output set to contract by 1.0 per cent. However, growth is expected to get stronger over the next few years.

Nominal retail sales will grow by 3.7 per cent this year and another 4.4 per cent in 2024. This growth follows double-digit gains driven by the recovery from the pandemic and higher inflation in each of the past two years.

In the near term, Windsor’s construction sector will get most of its growth from Stellantis’s EV battery plant and the Gordie Howe International Bridge.

Construction also started recently on a $60-million student residence at the University of Windsor. The building will have 450 beds in 226 suites and likely open in 2025.   

Investment in the city will continue to roll in after current projects conclude: construction of the $2-billion Windsor-Essex acute care hospital will likely start in 2026. 

Ontario’s More Homes Built Faster Act will support new home construction over the next few years, especially as inflation and interest rates stabilize toward the end of 2024.

Housing starts in Windsor rose to 1,520 units in 2022. We expect starts to fall to 1,380 units this year but trend upward throughout the rest of the forecast period. By 2027, housing starts will reach 1,680 units.

Overall, after leaping ahead by 8.2 per cent this year, construction output is set to grow at an average annual rate of 1.8 per cent between 2024 and 2027.