OTTAWA, Sept. 23, 2015 /CNW/ - Toronto will have one of the fastest growing metropolitan economies in the country this year, behind only Vancouver, according to The Conference Board of Canada's Metropolitan Outlook: Autumn 2015.
"Following healthy growth in 2014, Toronto's economy is poised for more good news," said Alan Arcand, Associate Director, Centre for Municipal Studies. "Construction is set to pick up thanks to robust residential and non-residential activity. This combined with a healthy services sector will keep Toronto's economy growing at a solid pace this year and next."
- Toronto's economy is expected to expand by 2.6 per cent in 2015 and 2.8 per cent next year.
- An increase in housing starts and numerous non-residential projects will boost construction activity in the region.
- Vancouver will be the fastest growing metropolitan economy in the country this year, while long-standing economic leaders Calgary and Edmonton face recession.
Toronto's economy grew by 3.1 per cent in 2014, the strongest gain in four years. Real GDP is set to expand by 2.6 per cent this year and at a similar rate next year. The expanding economy will in turn lift employment by 2.6 per cent this year with growth expected to continue in 2016.
Higher housing starts and numerous non-residential projects will boost construction activity in the region. New home construction is expected to increase from 29,000 units in 2014 to 34,700 units this year. Meanwhile, construction continues on a number of office buildings in the downtown core, including Bay Adelaide Centre East, One York, and Ernst and Young Tower. Meanwhile, the city is in the midst of a major expansion and upgrade of its transit system. All in all, construction output is projected to expand by 2.8 per cent this year.
Improvements are also expected in Toronto's services-producing industries. The robust housing market will boost activity in finance, insurance and real estate. Meanwhile, personal services output will grow by 4 per cent this year, thanks to the weaker loonie, the strengthening U.S. economy, and Toronto's hosting of the PanAm/Parapan Am Games, all of which have helped boost tourism to the region.
The low Canadian dollar and the strengthening U.S. economy also bode well for Toronto's export-oriented manufacturing sector. After expanding by 4.1 per cent last year, manufacturing output will climb by a more moderate 1.9 per cent this year, before picking up again next year with a 3.9 per cent increase. However, despite the recent gains in output, manufacturing employment has declined in three of the past five years. This is a continuation of a long-term trend that has lowered manufacturing employment to about one-third below its 2004 peak. Manufacturing employment is projected to fall by a further 0.6 per cent this year before growing modestly next year.
Of the 13 CMAs covered in the report, Vancouver will have the fastest growing metropolitan economy in 2015. Toronto, Winnipeg, Halifax, and Montréal round out the top five spots. These cities are all on track to post economic growth above 2 per cent. In contrast, long-standing economic leaders Calgary and Edmonton face recession.
SOURCE Conference Board of Canada
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