Edmonton, Kitchener, Halifax and Vancouver also show strong momentum
TORONTO, Jan. 19, 2012 /CNW/ - The growing economic diversity of Toronto has once again seen the city take the top spot among the country's major cities in CIBC World Markets' latest Canadian Metropolitan Economic Activity Index rankings.
"For the second time in a row, the city of Toronto emerged as the one to beat, with the city showing the fastest economic momentum as of the third quarter of 2011," says CIBC Deputy Chief Economist Benjamin Tal in his latest Metro Monitor report. "What's so impressive about the ranking of Toronto in our current reading is not that the city is once again ranked first among the country's largest 25 metropolitan areas, but the fact that it has been in the top five for more than six consecutive years, with the only exception being the 2009 recession when Toronto's ranking slipped to the 7th place."
The city's index of economic momentum is currently at its highest level in more than 10 years led by growth in population, employment and housing starts.
Since bottoming out in third quarter of 2009, Toronto's population has risen by 3.9 per cent—much faster than the 2.5 per cent growth seen in the nation as a whole. Employment growth across the same period has also been strong, up by 4.6 per cent in the city vs. 3.4 per cent nationally. As importantly, a larger portion of Toronto's new jobs have been full-time positions.
While the city did not lead the pack in any of CIBC's sub-measures of economic momentum, the consistent strong performance of Toronto across most of the 9 key macroeconomic variables reflects the growing diversity of the city's economic engine.
"At 1.8 per cent annual pace, the city's population is growing fast and ranked 3rd in the nation," adds Mr. Tal. "While the labour market is showing signs of fatigue, the quality of employment continues to improve. As well, the level of consumer bankruptcies is well below the national average while the real estate market continues to act as an important driver. At only 1.4 per cent, the apartment vacancy rate in the city is currently at a 10-year low, while non-residential construction activity has already reached pre-recession levels."
Edmonton ranked second in CIBC's measure or economic momentum, up from 11th in the 2011 Q1 report. The ranking reflects the city's strong labour market with overall employment rising by almost eight per cent year-over-year in the third quarter—the fastest pace among all of Canada's top cities. "The city also enjoyed one of the lowest unemployment rates in the nation (5.7 per cent as of the third quarter of 2011) while the quality of employment is relatively elevated (ranked 4th among all cities)," notes Mr. Tal.
"As well, Edmonton's population is now rising by a year-over-year rate of 1.7 per cent—well above the national average, while the numbers of consumer and business bankruptcies are among the lowest in the nation."
The city of also Kitchener continues to show positive momentum and is currently ranked third after placing second in Mr. Tal's previous rankings. The position reflects a strong population growth, a relatively high quality of employment, strong growth in construction activity and low levels of business and consumer bankruptcies.
"The city of Halifax did not lead the pack in any of our sub-measures of economic momentum, but it ranked high enough in many categories to achieve the fourth spot in our current ranking (up from eighth)," says Mr. Tal. "The city enjoyed a relatively healthy population growth while the labour market is performing somewhat above average. The real estate market is well balanced, with housing starts rising by well over 40 per cent (year-over-year) in the third quarter of 2011."
Vancouver is ranked fifth in the CIBC index, up slightly from its 7th place in the first quarter of 2011. "The city continues to enjoy above average population growth, while the pace of job creation and the level of employment quality are well above the national average. While improving recently, the unemployment rate is still relatively high, just one tick below the national average, while the pace of real estate activity is starting to slow."
CIBC Metropolitan Economic Activity Index (2011 Q3)
|Rank||CMA||3Q Moving Average|
||Average of 25 CMAs||10.2|
About the CIBC Metropolitan Economic Activity Index
Using 9 key macroeconomic variables, CIBC's metropolitan index of economic activity is structured in a way that approximates the change in each city's level of economic activity. With data going back in history, the index monitors not only the current performance of a given city but also tracks its cyclical behaviour against the national economy and other census metropolitan areas (CMAs). The focus is on the 25 largest CMAs in Canada.
The macro variables used to develop the index are:
- Population growth;
- Employment growth;
- Unemployment rate;
- Full-time share in total employment;
- Personal bankruptcy rate;
- Business bankruptcy rate;
- Housing starts;
- MLS Housing resales; and
- Non-Residential building permits.
The complete CIBC World Markets report is available at: http://research.cibcwm.com/economic_public/download/metro_monitor.pdf
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