OTTAWA, March 3, 2016 /CNW/ - Many Ontario mid-sized metropolitan economies are expected to benefit from stronger manufacturing activity in 2016. Most will see solid economic growth at or above 2 per cent this year, according to The Conference Board of Canada's Metropolitan Outlook: Winter 2016.
"A healthy U.S. economy and weaker Canadian dollar have breathed some life into the manufacturing sector, especially Ontario's auto sector, and this is helping support growth in many southwestern Ontario cities," said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada.
- Kitchener-Cambridge-Waterloo's economy is forecast to grow by 2.7 per cent in 2016, making it the fifth fastest growing metropolitan economy in Canada this year.
- London's real GDP is forecast to increase by 2.2 per cent in 2016, the first time since 2005 that growth is projected to surpass 2 per cent.
- Oshawa and Windsor can each expect economic growth of 2 per cent in 2016.
- St. Catharines-Niagara's economy is forecast to expand by 1.7 per cent.
- Vancouver's real GDP is forecast to grow 3.3 per cent, making it the fastest growing economy among the 28 census metropolitan areas covered in this edition of the Metropolitan Outlook.
Kitchener-Cambridge-Waterloo's economy is forecast to edge up to 2.7 per cent in 2016, from 2.6 per cent the previous year. Ongoing work on Waterloo Region's light-rail construction project will boost local construction output by 9 per cent this year, despite an expected decline in housing starts. The region's diverse manufacturing sector is expected to expand by 2.1 per cent in 2016, thanks to positive developments at Toyota's Cambridge plant, expansions by drone maker Aeryon Labs, Grand River Foods, and Blackberry's push into driverless car technology. Employment is forecast to climb by 2.1 per cent this year, following a 1 per cent dip in 2015.
London's real GDP is forecast to increase by 2.2 per cent in 2016, the first time since 2005 that growth will surpass 2 per cent. Leading the way will be the key manufacturing industry, with output growth of 3 per cent on tap for this year. Auto parts manufacturers are benefiting from strong vehicle sales south of the border, as well as a lower Canadian dollar. At the same time, the construction sector is expected to post solid gains thanks to new non-residential and mixed-used developments and stable housing starts. Meanwhile, the services sector is expected to experience its highest growth rate since 2007. In particular, wholesale and retail trade output is forecast to expand by
2.8 per cent this year, as the healthier economy prompts consumers to spend more. Although job growth is projected to be flat this year, it follows on the heels of a 3.1 per cent gain in 2015.
Oshawa's economy will to continue to expand moderately, rising by 2 per cent in 2016. The local manufacturing sector will get a bit of a reprieve in 2016, as General Motors has decided to keep producing the Chevrolet Equinox in Oshawa through at least 2017. The lower dollar and growing U.S. economy should also help boost local manufacturing output by 1.8 per cent in 2016. The wholesale and retail trade sector is expected to see stronger growth this year as well, as consumers increase spending in line with faster income growth and a rebound in employment, which is expected to grow by 3.9 per cent in 2016, more than offsetting a 3.7 per cent fall in 2015. However, slower growth is anticipated in the construction industry, which will be held back by declining housing starts.
Led by a strong performance in manufacturing, Windsor's real GDP is forecast to rise by 2 per cent this year, which would be the third consecutive year of growth at or above
2 per cent. Likewise, employment is expected to keep growing, albeit at a more modest pace of 0.4 per cent, down from a vigorous 2.8 per cent increase in 2015. Americans' growing appetite for cars and trucks, along with the lower loonie, has been good news for the Windsor manufacturing sector, which is forecast to grow by 3.6 per cent this year. Fiat Chrysler recently completed a $3.7-billion overhaul of its Windsor plant to produce a redesigned minivan and has hired 1,200 new workers for the rollout of the new vehicle.
Growth has been slow but steady for St. Catharines-Niagara's economy and this trend will continue this year. Manufacturing and tourism activity is on the rise in the Niagara region, thanks to the stronger U.S. economy and lower loonie. Manufacturing output is expected to grow by 2 per cent in 2016, while personal services output, which includes several tourism-oriented industries, is set to increase by 1.3 per cent. In all, St. Catharines-Niagara's real GDP is forecast to rise 1.6 per cent in 2016. Unfortunately, employment is forecast to decline by 1.8 per cent this year, but this follows a gain of 3.8 per cent in 2015, the biggest increase in 15 years.
Released today, Metropolitan Outlook: Winter 2016, is The Conference Board of Canada's once-a-year analysis of 28 Canadian census metropolitan areas.
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SOURCE Conference Board of Canada
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