Outlook improving for most small- and medium-sized metropolitan areas
But economic growth remains tepid, according to the Conference Board of Canada.
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Conference Board of Canada
OTTAWA — The economies of most small- and medium-sized metropolitan areas in Canada are expected to grow faster this year than 2013, according to The Conference Board of Canada’s Metropolitan Outlook: Summer 2014.
Even so, eleven of the 15 cities covered can expect economic growth of less than 2%.
“The recovery in manufacturing production is helping support growth in many of Canada’s small- and medium-sized metropolitan areas,” said Alan Arcand, Associate Director, Centre for Municipal Studies. “Still, economic growth remains muted. Only four cities—Abbotsford-Mission, Kitchener-Cambridge-Waterloo, Oshawa, and Moncton—will see growth above 2% this year.”
Abbotsford-Mission will have the fastest growing economy following an increase of 3% in 2013. Real GDP growth will remain relatively steady at 2.9% this year. Wood products manufacturing is benefiting from the recovery in the US housing market, while growth in construction activity is being supported by a number of non-residential projects.
Moncton’s economy is expected to see growth accelerate from 1.2% last year to 2.1% in 2014, thanks to a modest recovery in construction and decent gains in the finance, insurance, and real estate sector. Construction activity in Saint John is also improving modestly. This, along with healthy wholesale and retail trade output, will help support economic growth of 1.4% in Saint John this year, a big improvement over the 0.2% gain last year.
Economic growth in St. John’s, Newfoundland and Labrador is forecast to slow sharply from 8.5% in 2013 to 1.6% this year.
In 2013, the economy was boosted by increased offshore oil production and significant gains in the construction sector. This year, growth in oil production will be relatively modest and construction activity is set to decline as work wraps up on the nickel-processing plant in Long Harbour.
Kitchener-Cambridge-Waterloo’s real GDP will grow by 2.5% this year, as construction starts on a light rail transit system and local manufacturing output bounces back from a small decline in 2013.
Last year, Oshawa’s economy was hampered by declines in manufacturing and transportation and warehousing. Both sectors are expected to improve this year as demand picks up both at home and in the US, lifting Oshawa’s economy by 2.5% in 2014.
Following modest growth of 0.6% in 2013, Windsor’s real GDP is forecast to rise by 1.6% in 2014. Local auto plants are benefiting from rising car sales in both Canada and the US.
Following a contraction of 0.1% in 2013, real GDP in London is forecast to increase by 1% this year thanks to improvements in the services sector and a modest rebound in manufacturing activity. However, the economic growth will not be strong enough to generate new jobs, as employment in London is set to fall for the fifth time in seven years in 2014.
The combination of stronger manufacturing activity and steady gains in the services sector will allow real GDP growth in St. Catharines-Niagara to improve from 0.6% in 2013 to 1.2% this year.
Kingston’s economy will continue its recent trend of moderate growth this year, with real GDP forecast to expand by 1.2% in 2014. The city’s economy will be held back by declines in manufacturing and construction output, while growth in the services sector will be modest.
The ongoing recovery in Thunder Bay’s forestry industry will push up the city’s overall economic growth to 1.5% this year. In Sudbury, a rebound in manufacturing will offset slower growth in primary and utilities, meaning the economy will expand 1.1% this year, little changed from the 1% growth seen in 2013.
Cities in Quebec face another year of weak growth
Helped by a stronger US economy and a slightly weaker Canadian dollar, manufacturing output in both Saguenay and Sherbrooke is set to improve in 2014. Saguenay’s economy will also benefit from steady growth in the services sector and a modest recovery in forestry, allowing real GDP to grow by 1.3% in 2014.
In Sherbrooke, the rebound in manufacturing output will help offset a decline in construction activity, resulting in 1% economic growth this year.
Trois-Rivières’ real GDP is forecast to fall 1.2% this year, the fourth annual contraction in a row, as the closure of the Gentilly-2 nuclear plant continues to reverberate through the economy.
On a positive note, new factory announcements and two new call centres will eventually help restore economic growth in Trois-Rivières starting in 2015.