OTTAWA, March 13, 2018 /CNW/ - Ottawa–Gatineau's economy is expected to experience a slight cooling in growth this year in the wake of last year's national 150th celebration and robust public administration expansion, according to The Conference Board of Canada's Metropolitan Outlook: Winter 2018. In Kingston, the economic growth deceleration is expected to be sharper.
"Like most of Ontario, the pace of economic expansion will be more moderate for Ottawa-Gatineau and Kingston this year," said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada. "Growth in Ottawa–Gatineau's all-important public administration sector is expected to slow this year, but strength in non-residential construction and high-tech will keep the economy growing at a still-healthy pace. Kingston, however, faces a broad-based slowdown."
Highlights
- Ottawa-Gatineau's real GDP is forecast to rise 2.1 per cent this year.
- Kingston's economy is forecast to expand by a more moderate 1.5 per cent in 2018.
- Vancouver is forecast to be the fastest growing census metropolitan area (CMA) in Canada this year, although real GDP growth is forecast to slow to 2.7 per cent.
Ottawa-Gatineau
Ottawa–Gatineau's real GDP is forecast to rise 2.1 per cent in 2018, a moderation from the 2.7 per cent increase last year. The dominant public administration sector has been in expansion mode over the past few years, providing a huge boost to a government-centric capital city. However, the pace has been unsustainable and public administration output is forecast to rise by a more modest 1.8 per cent this year.
Canada's 150th birthday generated a substantial volume of tourists who flocked to the nation's capital to take in the celebratory events and exhibits. But now the party is over, and Ottawa's tourism-related industries face a slower 2018.
On a more positive note, a plethora of current and future projects will help drive construction output growth in 2018. This includes projects on and around Parliament Hill, a possible new underground visitor welcome centre, an arena complex to house the Gatineau Olympiques junior hockey team and three smaller community ice pads, a new central library for the City of Ottawa, the redevelopment of LeBreton Flats, and the O-Train light-rail transit system.
The region's high-tech sector is also contributing to Ottawa's economy, as it continues to diversify away from telecommunications. As a result, output growth in Ottawa's professional, scientific, and technical services industry is expected to accelerate over the next two years.
Despite the slower economy, solid employment growth of 1.5 per cent is expected in 2018.
Kingston
After posting a 2.6 per cent gain last year, Kingston's real GDP is forecast to expand by a more moderate 1.5 per cent in 2018, albeit still above the 10-year average of 1.3 per cent.
Growth in the region's services sector is projected to come in at 1.6 per cent this year. The publicly funded health care industry will be the region's top performer this year, as an aging population drives demand for medical services. Meanwhile, output growth in the finance, insurance, and real estate industry is expected to cool slightly as the housing market faces higher interest rates and thus slower activity. On the goods side, the construction industry will see growth cool after seeing three sizable gains between 2015 and 2017, while the manufacturing sector will continue to post slow but steady gains.
Job growth surged to a 16-year high last year, so a pullback is inevitable. Indeed, in line with our more moderate GDP outlook, we expect employment to contract by 0.7 per cent this year. As a result, Kingston's jobless rate will edge up slightly from 5.7 per cent in 2017 to 5.8 per cent in 2018.
Released today, Metropolitan Outlook: Winter 2018, is The Conference Board of Canada's once-a-year analysis of 29 Canadian census metropolitan areas.
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