OTTAWA, May 14, 2015 /CNW/ - Montréal's economy will advance by 2.6 per cent in 2015, led by healthy activity in both construction and manufacturing, according to The Conference Board of Canada's Metropolitan Outlook: Spring 2015.
"We expect that this will be Montreal's fastest growth rate since 2002," said Alan Arcand, Associate Director, Centre for Municipal Studies. "What's more, an even stronger increase of 2.7 per cent is forecast for 2016."
- Montréal's real GDP growth is forecast to accelerate to 2.6 per cent in 2015 from 2.2 per cent in 2014.
- The manufacturing and construction sectors are expected to be growth leaders, the latter benefiting from major infrastructure projects such as the Champlain Bridge replacement.
- Toronto, Vancouver and Halifax are expected to be the fastest growing metropolitan economies in the country this year.
Manufacturing output is forecast to expand by 3.7 per cent this year, the fastest since 2000, following a 2.6 per cent gain in 2014. Hiring is expected to pick up too. A weaker Canadian dollar and improvement in the U.S. economy are key factors behind this positive outlook. More specifically, Montréal's vital aerospace industry faces decent prospects thanks to low interest rates, the recent decline in oil prices, modestly stronger economies abroad, and the global rise of emerging regions.
The outlook is also bright for the construction industry. A number of large infrastructure projects beginning in 2015, such as the Champlain Bridge replacement, should boost construction output by 5.3 per cent following a two year slump, including a 2 per cent contraction in 2014.
The stronger economy bodes well for the local job market. In fact, employment is expected to post growth of 1.2 per cent in Montreal this year. However, a slightly stronger increase in the labour force will push the area's unemployment rate up to 8.3 per cent.
Montreal's retail sector will be weighed down this year by slower income growth as well as high levels of household debt. Following a healthy increase of 4.5 per cent in 2014, retail sales growth will slow to 2.8 per cent this year, and in turn lead to a drop-off in wholesale and retail trade output.
Provincial austerity will hit the non-commercial services sector such as publicly funded schools and hospitals. Growth in that sector will remain below 2 per cent for the second straight year in 2015.
Most of the 13 CMAs covered in the report will see their economic fortunes improve this year, boosted by lower oil prices, as well as a weaker Canadian dollar and improvement in the U.S. economy with the exception of Calgary, Edmonton, Regina and Saskatoon. Toronto, Vancouver and Halifax are the fast growing metropolitan economies this year, with each posting growth of 3.1 per cent.
SOURCE Conference Board of Canada
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