Olympics to bring gold to Vancouver's economy in 2010

OTTAWA , Jan. 27 /CNW Telbec/ - Vancouver is expected to top the podium in terms of economic growth among Canadian cities this year, according to the Conference Board's Metropolitan Outlook - Winter 2010.

"Only four Canadian cities posted economic growth of any kind in 2009 -Halifax, Saint John, Winnipeg and Regina," said Mario Lefebvre , Director, Centre for Municipal Studies. "Fortunately, Canadian cities are on the rebound in 2010, although the pace of recovery will vary markedly."

" Vancouver is poised for a substantial rebound. In addition to the boost provided by the Olympic Winter Games, housing construction and consumer spending are forecast to rebound strongly this year."

Vancouver's economy declined by 1.8 per cent in 2009, due to declining manufacturing output and faltering construction activity. The housing market started to rally in the second half of the year, and builders are expected to break ground on twice as many homes this year as in 2009. With economic growth of 4.5 per cent, Vancouver is expected to lead all Census Metropolitan Areas (CMAs) covered by the Conference Board. This is the one annual Conference Board outlook where forecasts for all 27 CMAs covered in the Metropolitan Outlook are completed at the same time.

Toronto and Kitchener are expected to take silver and bronze positions, respectively. All sectors of Toronto's economy are forecast to rebound in 2010, leading to overall real gross domestic product (GDP) growth of 3.5 per cent. Manufacturing output is expected to increase in Toronto this year for the first time since 2005.

Improving manufacturing prospects are also expected to lead to growth of 3.3 per cent this year in Kitchener.

Four CMAs - Oshawa and Ottawa-Gatineau in Ontario, and Edmonton and Saskatoon in the west - are forecast to post growth of 3.2 per cent in 2010.

After two years of declining GDP, Oshawa's economy will benefit from the worldwide recovery now underway, especially in its key auto manufacturing industry. Housing starts are expected to double from 2009 levels, which will boost the construction sector.

Edmonton's economy declined in 2009 for the first time since 1991, and even though overall growth will rebound in 2010, the outlook for the job market remains modest. Housing starts have some ways to go before achieving a full recovery, but population growth continues to be steady in the CMA, which bodes well for residential construction over the medium term.

Ottawa-Gatineau underwent a mild contraction last year, but still posted one of the better results in the country. In 2010, the high-tech sector should rebound modestly, while consumer spending already started to increase in the second half of 2009 and should continue to do so through this year. The federal government is expected to contribute to the CMA's growth in 2010. However, a sizeable budget deficit is increasing the probability of softer growth in federal government spending over the medium term, which represents a risk to the outlook.

After two red-hot years, Saskatoon's economy suffered a temporary reversal in 2009, yet employment continued to grow. Buoyed by strong population increases, the economy should return to a steadier and more sustainable pace of growth in 2010.

Growth Returns in Western CMAs

After two years of falling output, Abbotsford's economy is expected to grow by 3.1 per cent, thanks to a rebound in the manufacturing sector, a better year for housing starts, and a turnaround in retail sales brought on by improved consumer confidence.

Last year, Calgary experienced its first recession since 1989, but the CMA's economy is forecast to grow by 3 per cent in 2010. An improved construction outlook will lead to a rebound in the goods sector, and solid growth in retail sales will bolster the services sector.

Improved retail sales and stronger housing demand - starts are expected to rise more than 66 per cent over last year - are the key factors responsible for real GDP growth of 2.8 per cent in Victoria.

Growth in Regina's economy is expected to accelerate to 2.8 per cent this year, up from 0.1 per cent in 2009. The allure of a strong job market continues to draw more newcomers to Regina.

Winnipeg's steady economy avoided recession in 2009, and will grow by 2.5 per cent this year. Winnipeg is enjoying a multi-year period of strong in-migration, allowing for the CMA's residential construction industry to thrive.

Hard-hit Ontario CMAs Start to Rebound in 2010

Hamilton's economy is expected to grow by 3 per cent in 2010, the first gain in output since 2007. The manufacturing and construction downturns in the CMA appears to have hit bottom - in fact, manufacturing output is expected to grow for the first time in eight years.

Following a decline of 6 per cent in 2009 (the largest among the 27 CMAs in the outlook), Windsor's economy can expect to grow for the first time in four years. An improved auto outlook and a combination of higher housing starts and non-residential projects will lead to growth of 2.6 per cent in 2010.

Sudbury is forecast to post growth of 2.6 per cent in 2010. The outlook is at risk, however, given that the labour unrest at Vale Inco is still not resolved.

Although Kingston posted its worst economic performance on record in 2009, the economy has been improving since the third quarter of last year. The CMA's public sector, which sheltered Kingston from the full effects of the recession, is expected to remain strong, helping the economy to grow by 2.5 per cent.

With real GDP growth of 2.5 per cent in 2010, London will begin to reclaim some of the economic ground lost over the previous two years. While growing throughout 2010, the CMA's job market will not offset the losses incurred in 2009.

St. Catharines-Niagara is forecast to post growth in manufacturing output for the first time in a decade, and the housing market should emerge in 2010 from five years of decline. All in all, the CMA's economy is forecast to grow by 2.4 per cent in 2010.

Thunder Bay's economy will emerge from four years of declining GDP with a tepid growth rate of 0.8 per cent, the slowest among the 27 CMAs in the Metropolitan Outlook. Although the "old" economy (particularly forestry) continues to struggle, diversification into medical technologies is expected to start paying off.

Steady Growth in Quebec CMAs

Quebec City's real GDP fell by just 0.2 per cent last year, and the capital will lead Quebec CMAs in growth again in 2010. A rebound in manufacturing and wholesale and retail trade, combined with continued gains in construction and finance, insurance and real estate, will produce real GDP growth of 2.6 per cent in 2010.

Montreal's economy declined for the first time since 1991 last year. Fortunately, activity began to rebound in the third quarter of 2009, and the pace of growth in most sectors is forecast to accelerate in 2010, producing real GDP growth of 2.5 per cent for the year as a whole. Job growth will recover enough to erase the CMA's overall employment losses recorded in 2009.

Like Montreal , Sherbrooke's economy declined last year for the first time since 1991, and growth also resumed in the second half of the year. Steady gains in most sectors of the economy will lead to real GDP growth of 2.5 per cent this year.

Trois-Rivières suffered its biggest economic loss in 13 years in 2009, but still ranked in the top 10 among Canadian CMAs last year. Real GDP is forecast to grow by 2.1 per cent in 2010, led by a recovery in manufacturing and solid non-residential construction activity.

Saguenay's economy will increase for the first time in three years, with the Conference Board calling for growth of 1.4 per cent in 2010. However, employment in the CMA is expected to remain flat for the next two years.

Atlantic Cities Avoid Boom and Bust Cycles

Atlantic Canada had the top two performing metropolitan economies in 2009 - Halifax posted growth of 1.6 per cent and Saint John grew by 1.3 per cent. But although growth rates in 2010 are actually expected to surpass those of last year, these CMAs will fall down the rankings this year.

Halifax achieved the fastest growth rate in the country last year, thanks to its role as a services hub in the Atlantic region. A rebound in manufacturing activity and stronger consumer spending will allow real GDP growth to accelerate to 2.4 per cent this year.

Saint John posted positive growth in 2009 thanks to a solid performance by the services sector, leading to a 4.4 per cent increase in employment. Although job growth is expected to stall this year, higher government spending will boost services output, leading to real GDP growth of 1.9 per cent.

Domestic demand remained resilient in St. John's last year, even as provincial oil production dropped. With oil production expected to decline again this year and housing market activity forecast to weaken from its torrid pace of recent years, real GDP growth will be limited to 1.4 per cent in 2010.

The Metropolitan Outlook, published quarterly by the Conference Board's Centre for Municipal Studies, contains a medium-term economic forecast for 27 Canadian CMAs, as well as the provinces and Canada . It differs from the Conference Board's recently published City Magnets II: Benchmarking the Attractiveness of 50 Canadian Cities, which assessed how well cities attract people based on 41 indicators grouped in seven broad categories. Economic performance was just one of the categories used in the City Magnets II analysis.

For further information: Brent Dowdall, Media Relations, Tel.: [phone] ext. 448, E-mail: [email protected]