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Big growth expectations for prairies, Alberta: CBOC

While significant growth is expected in Canada’s interior, its coastal cities are expected to be hit hard in 2012 due to federal infrastructure spending cutbacks


January 12, 2012
by Canadian Manufacturing Daily Staff

OTTAWA—Saskatoon, Calgary, Edmonton and Regina will benefit from solid global demand for their resources to post the strongest economic growth among Canadian cities in 2012, according to a new Conference Board of Canada (CBOC) report.

The Metropolitan Outlook-Winter 2012 analyzes 27 Canadian census metropolitan areas (CMAs).

“In spite of global economic turmoil, high prices for agricultural products, minerals and oil are likely to continue. Canada’s prairie cities will reap the benefits of this global demand for commodities,” said Mario Lefebvre, director of the Centre for Municipal Studies.

He said, however, the outlook is not as promising for cities in central and eastern Canada because of slow recovery in manufacturing and the windup of fiscal stimulus that’s hampered economic growth.

Resource Boom Boosts Prairie Cities

Saskatoon is forecast to lead the country in economic growth this year.

But the news is slightly bittersweet as the province’s four per cent increase in GDP for 2012 is actually a slowdown from the estimated 4.6 per cent gain in 2011.

The province’s booming primary sector is supporting gains in all industries and employment is expected to grow by almost five per cent this year.

Continued growth in Alberta’s energy sector and solid domestic demand will boost Calgary’s real GDP by 3.6 per cent in 2012. In 2013, Calgary is forecast to lead all Canadian cities with growth of 4.9 per cent.

Edmonton’s economy created almost 40,000 jobs last year alone—a six per cent increase —which will help domestic demand entering 2012. Strong energy activity will also contribute to real GDP growth of 3.4 per cent in 2012.

Regina’s economy grew by more than five per cent in 2011, second only to St. John’s. Growth will ease to 2.9 per cent in 2012, ranking Regina fourth among Canadian CMAs. Strong employment growth is drawing migrants to the city, boosting demand for housing  and consumer spending.

Winnipeg is expected to rank in the top half of Canadian CMAs for economic growth in 2012. Winnipeg’s manufacturing sector is forecast to post its best performance since 2007, lifting overall economic growth to 2.4 per cent in 2012.

Global Uncertainty Weighs Heavily on Ontario CMAs

Despite the slow U.S. recovery and strong Canadian dollar, Toronto and Oshawa’s manufacturing sectors are expected to post decent gains this year.

But output in both cities will remain below peak levels. Construction levels in both cities will dampen because of dwindling public infrastructure spending.

Oshawa’s manufacturing sector will receive a 2.7 per cent boost from the start of production on a new General Motors model. Toronto’s economy is forecast to grow by a 2.6 per cent this year—a modest improvement on 2011.

Growth in Hamilton’s manufacturing sector will be limited by the shaky global economy. Real GDP is expected to increase by two per cent in 2012, a slight increase from 2011.

Fiscal Restraint Slows Growth in British Columbia CMAs

A weaker outlook in the construction industry will hold real GDP growth to 2.6 per cent this year in Vancouver, down slightly from the estimated 2.9 per cent increase recorded in 2011.

A decline in residential construction activity and the winding down of a federal  infrastructure program will more than offset growth in the manufacturing and services sectors.

Growth in St. John’sTumbles in 2012

St. John’s led the CMA growth rankings in both 2010 and 2011, thanks in part to 25 per cent annual average growth in construction output over that period.

Waning offshore oil production wells, fewer housing starts and the end of the infrastructure spending program will weaken economic growth to just 0.7 per cent this year, lowest among the 27 CMAS covered in the Metropolitan Outlook.

Halifax’s real GDP growth will ease from 2.6 per cent in 2011 to 2.4 per cent this year. Activity at the Halifax Shipyard will decline in 2012 following two strong years. However, work on new naval frigates at Irving Shipyard in 2013 will help boost the outlook in subsequent years.