Vancouver Holds On to Top Spot in Economic Growth This Year and Next

OTTAWA, Nov. 14, 2016 /CNW/ - Vancouver will be the fastest growing metropolitan economy in the country this year and next, according to The Conference Board of Canada's Metropolitan Outlook: Autumn 2016.

"Vancouver is on track to boast the fastest-growing metro area economy for the second straight year in 2016, as the region's housing market remains one of the metro area's key engines of growth," said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada. "While Vancouver's economy is forecast to slow next year, partly due to federal and provincial government measures directed at cooling the over-heated housing market, the pace of growth still will be strong enough to maintain the metro area's first place ranking."

Highlights

  • Vancouver's real GDP is expected to grow by 4 per cent his year, and slow to a still solid 2.8 per cent in 2017.
  • Along with Vancouver, Toronto and Halifax are expected to be among the growth leaders this year.
  • The economies of Calgary and Edmonton are expected to contract for a second year in a row in 2016, before rebounding next year.

Vancouver's economy is on track to expand by 4 per cent this year, on the heels of a 4.1 per cent gain in 2015. Thanks to record-level housing starts and many non-residential projects, the construction sector will be Vancouver's top-performer in 2016, with the finance, insurance and real estate sector not too far behind. However, federal and provincial governments' actions to cool the overheated housing market will take some steam out of the economy over the near term, leading to slower growth in construction and in finance, insurance, and real estate. While it is difficult to predict the extent to which the measures will impact the economy, we estimate output in these two industries will be a total of about $290 million lower in 2017 compared to a scenario where no policy changes had been made. All in all, real GDP growth is forecast to slow to a still solid 2.8 per cent in 2017.

Along with Vancouver, Toronto and Halifax are expected to be among the growth leaders this year. Toronto's economy is forecast to expand by 3.4 per cent this year and by 2.6 per cent in 2017, led by solid advances in transportation and warehousing, in manufacturing, and in finance, insurance and real estate. The latter sector continues to benefit from persistent strength in Toronto's resale housing market.

Halifax continues to reap the benefits of a diverse economy, as most sectors are expected to contribute positively to growth this year and next. That said, manufacturing remains a standout performer, as the multibillion-dollar federal government shipbuilding contract continues to drive vigorous growth in this industry. Halifax's economy is forecast to grow by 2.6 per cent his year and by 2.5 per cent in 2017.

Meanwhile, the economies of Calgary and Edmonton are expected to contract for a second year in a row in 2016, before rebounding modestly next year. Low oil prices continue to cause widespread economic pain across most cities in Alberta, including Calgary and Edmonton. However, 2016 should mark the end of this latest recession, as both metropolitan economies are expected to start recovering next year, in line with gradually rising crude oil prices. Calgary's economy is expected to contract by 2.1 per cent in 2016, before rebounding by 2 per cent in 2017. Similarly, Edmonton's economy is on track to post 1.4 per cent decline this year, followed by growth of 2 per cent next year.

The remaining eight Census Metropolitan Areas in this forecast are on track to post growth in real GDP ranging between 2.5 per cent and 1.3 per cent in 2016.

Join Alan Arcand on November 22, 2016 for a webinar, Beyond Slogans: Comparing Canadian Cities to the World's Best, which describes how five Canadian cities—Toronto, Montréal, Vancouver, Calgary, Halifax—compare economically and socially against some of the leading metropolitan areas in the world.

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SOURCE Conference Board of Canada

For further information: Yvonne Squires, Media Relations, The Conference Board of Canada, Tel.: 613- 526-3090 ext. 221, E-mail: corpcomm@conferenceboard.ca; Juline Ranger, Director of Communications, The Conference Board of Canada, Tel.: 613- 526-3090 ext. 431, E-mail: corpcomm@conferenceboard.ca

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