Prairie Cities to Remain Fastest Growing Metropolitan Economies in Canada over the Next Two Years

Link to publication: http://www.conferenceboard.ca/e-library/abstract.aspx?did=6556

OTTAWA, Oct. 20, 2014 /CNW/ - Edmonton, Saskatoon, Calgary and Regina are positioned to be the fastest growing census metropolitan area (CMA) economies in Canada this year and next, according to The Conference Board of Canada's Metropolitan Outlook: Autumn 2014.

"While economic growth in Edmonton, Saskatoon, Calgary, and Regina will cool from the red-hot pace seen in recent years, growth will remain brisk by national standards," said Alan Arcand, Associate Director, Centre for Municipal Studies.

"Cities in central and eastern Canada will see their economic fortunes improve this year and next, in line with strengthening economic activity in the United States, Canada's largest trading partner. That said, these cities will still generally see growth lag behind their Western Canadian counterparts."

HIGHLIGHTS

• Edmonton will have the fastest growing metropolitan economy in Canada with growth of 4.9 per cent in 2014.
• Along with Edmonton, Saskatoon, Calgary, Regina, and Vancouver will also post economic growth above three per cent this year.
• Economic growth in central and eastern Canadian cities is on track to improve this year and next, but they will still generally lag their western Canadian counterparts. 
  

Economic growth in Alberta is on track to be the strongest in the country in 2014 and its major cities are reaping the rewards. Edmonton's economy is forecast to grow by a nation-leading 4.9 per cent in 2014 due to continued strength in the construction, manufacturing, and energy sectors. Employment growth will also strengthen, as nearly 29,000 new jobs are expected to be created this year. Edmonton's economic growth is expected to slow next year, but still come in at a healthy 3 per cent.

Calgary's real gross domestic product (GDP) is forecast to reach 4 per cent this year, thanks in particular to continued strong gains in primary and utilities and in construction, and also to a healthy rebound in manufacturing. Economic growth is forecast to slow to 3.1 per cent next year.

With an unemployment rate of 3.6 per cent in Regina and 4.1 per cent in Saskatoon, tight labour markets in both cities will continue to draw newcomers and boost housing demand. However, economic growth in both cities will moderate from the red-hot pace of recent years. Saskatoon's economy is expected to expand by 4.2 per cent in 2014 and by 2.9 per cent in 2015. Similarly, Regina's GDP growth is forecast to ease to 3.8 per cent in 2014 and to 3.2 per cent in 2015.

Improving economic conditions will lead to the creation of some 30,000 jobs in Vancouver this year, a gain of 2.4 per cent over 2013. This will provide a boost to personal income growth and drive consumer spending. Overall, Vancouver's real GDP growth is forecast to reach 3.2 per cent in 2014 and 3 per cent in 2015.

Contractions in public administration and construction will limit Victoria's economic growth to 0.9 per cent this year. However, real GDP growth is expected to improve to 2.1 per cent next year when the provincial government is expected to balance its books.

Increased demand for locally manufactured transportation equipment will support overall real GDP growth of 2.2 cent in 2014 in Winnipeg. Next year, improvements in a number of industries, including non-commercial services and public administration, will lift real GDP growth to 2.8 per cent. 

Central Canadian CMAs Show Only Modest Gains in 2014, But 2015 Looks Better

Toronto's manufacturing sector is set to bounce back this year, thanks to an improving U.S. economy and a weaker Canadian dollar. However, falling housing starts will result in a reduction in overall construction activity, limiting real GDP growth to 2.3 per cent in 2014. Broad-based improvement next year will fuel economic growth of 2.8 per cent, Toronto's strongest gain in five years.

A turnaround in manufacturing will help lift Hamilton's economy by 1.3 per cent in 2014, up from a meagre 0.2 per cent gain in 2013. Further improvement is in store next year when a 2.3 per cent gain is forecast.  

Ottawa-Gatineau's economy continues to be hampered by federal government fiscal restraint. Real GDP is forecast to increase by just 0.7 per cent this year, before improving to 1.8 per cent in 2015.

Montreal's economy is on pace to expand by 1.8 per cent in 2014, making this the fourth straight year of growth below 2 per cent. Fortunately, this streak should be broken next year, as work on two major construction projects boosts real GDP growth to 2.5 per cent.

Economic activity in Quebec City is expected to remain moderate, although things are moving in the right direction. Real GDP growth is expected to improve from 1.6 per cent in 2013 to 1.8 per cent in 2014 and to 2 per cent in 2015.

In Halifax, higher offshore oil production will help boost output in the primary and utilities sector, while a long-term contract from the Canadian Navy will provide a lift to the Halifax Shipyard and to the overall manufacturing sector. All in all, Halifax's economy is forecast to expand by 2.7 per cent in 2014 and by 2.8 per cent in 2015.

This edition of the Metropolitan Outlook provides economic insights for 13 of the larger Canadian census metropolitan areas, the one or two largest in most provinces.

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SOURCE: Conference Board of Canada

Yvonne Squires, Media Relations, Telephone: [phone] ext. 221, [email protected]