Toronto to Be One of Canada's Growth Leaders This Year and Next

Healthy economic outlooks for Hamilton and Ottawa-Gatineau

OTTAWA, Nov. 14, 2016 /CNW/ - Toronto will remain one of Canada's fastest-growing metro economies this year and next, according to The Conference Board of Canada's Metropolitan Outlook: Autumn 2016. Hamilton's economy is forecast to remain steady over 2016 and 2017, while Ottawa-Gatineau's economy is projected to show modest improvement.

"Toronto and Hamilton's economies are both benefiting from solid advances in manufacturing and in finance, insurance and real estate," said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada. "Renewed hiring in the federal public service, an active non-residential construction sector, and a bright outlook for tourism are driving economic growth in Ottawa-Gatineau."

Highlights

• Toronto's real GDP is expected to expand by 3.4 per cent in 2016 and 2.6 per cent in 2017, making it the second fastest growing metropolitan economy in Canada, behind only Vancouver.
• Steady economic growth continues in Hamilton, with real GDP forecast to climb by a steady 2.2 per cent in 2016 and 2 per cent in 2017.
• Ottawa–Gatineau's economy is expected to grow by 1.7 per cent this year and 2.2 per cent in 2017.
• Vancouver will have the fastest-growing metropolitan economy this year and next, with growth of 4 per cent and 2.8 per cent, respectively.

Toronto

Toronto's economy is forecast to expand by 3.4 per cent this year and by 2.6 per cent in 2017. This year's fastest industry growth is expected to be produced by transportation and warehousing, which continues to benefit from the rising shipping requirements of a strong manufacturing sector. Indeed, the lower Canadian dollar and moderate U.S. demand continue to support activity in export-oriented sectors, such as manufacturing and tourism. Manufacturing output is forecast to expand 4.1 per cent this year, with a further 2 per cent increase on tap for 2017. At the same time, persistent strength in the resale housing market continues to boost output growth in finance, insurance and real estate. Meanwhile, construction activity is set to moderate to still healthy rates over 2016 and 2017, following an exceptional year in 2015. Housing starts are set to dip this year and next, but this will be more than offset by a humming non-residential construction sector. The bright economic outlook will be mirrored in the labour market, with the anticipated creation of a total of 109,000 jobs over 2016–17.

Hamilton

Hamilton's economy is forecast to expand 2.2 per cent in 2016 and 2 per cent in 2017. A lower Canadian dollar and moderate U.S. demand will help to boost manufacturing output this year and next. In fact, this year's projected advance of 4.1 per cent will be the sector's strongest performance since 2010. The robust manufacturing activity has helped spark a turnaround in Hamilton's transportation and warehousing sector. This sector will receive another boost next year when a new grain terminal opens at the Port of Hamilton. The finance, insurance and real estate sector is also adding to growth, thanks to strong resale and new housing markets. Indeed, housing starts are on pace to increase by double-digits this year, and we expect a further small increase in 2017. Despite the strong residential market, construction output is on track to decline this year. However, the industry is expected to bounce back in 2017. The steady economic gains bode well for the local labour market. Although employment is set to post a meagre gain this year, we expect job growth to accelerate sharply in 2017.

Ottawa-Gatineau

Ottawa-Gatineau's economy has emerged from a period of tepid growth that ran from 2012 to 2014, caused largely by federal government fiscal-belt tightening. In fact, the area's economy is on track to expand by 1.7 per cent this year and by a further 2.2 per cent in 2017. Higher levels of government spending will drive gains in public administration, with output forecast to rise by 1.1 per cent in 2016 and by 1.4 per cent in 2017. Ottawa-Gatineau's services sector will also benefit next year from all of the activity surrounding the country's 150th birthday celebrations. In addition to enhanced versions of regular events – like Canada Day, Winterlude and other recurring festivals – there will also be many additional events taking place in the region over the next year. Activity surrounding several major construction projects, including Phase 1 of Ottawa's light-rail project, is another strong contributor to growth. Local workers will benefit from the stronger economy: employment is forecast to grow by 0.9 per cent in 2016 and by 1.7 per cent in 2017. This will help push the region's unemployment rate down from 6.6 per cent this year to 6.1 per cent next year, which would be its lowest level since 2009.

Vancouver is expected to boast the fastest-growing metropolitan economy this year and next, among the 13 metro areas covered in this edition of the Metropolitan Outlook. At the other end of the spectrum, the economies of Calgary and Edmonton are expected to contract for a second year in a row in 2016, before rebounding modestly next year.

Join Alan Arcand on November 22, 2016 for a webinar, Beyond Slogans: Comparing Canadian Cities to the World's Best, which describes how five Canadian cities—Toronto, Montréal, Vancouver, Calgary, Halifax—compare economically and socially against some of the leading metropolitan areas in the world.

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SOURCE Conference Board of Canada

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