Strong Economic Growth in Western Canadian Cities Expected For Years to Come
Edmonton and Calgary are forecast to be the fastest growing census metropolitan areas (CMAs) in Canada – not only in 2012, but for the next four years, according to The Conference Board of Canada’s Metropolitan Outlook-Autumn 2012.
“Energy-related investment in Alberta is expected to stay vibrant throughout the next four years. For instance, about $29-billion worth of energy-related projects are now under way in the province, and nearly $86-billion worth of projects are proposed for the future,” said Mario Lefebvre, Director, Centre for Municipal Studies.
“Other Western cities, including Saskatoon, Regina and Vancouver, are expected to grow strongly in the years to come. Toronto’s economic performance is expected to rival that of its high-flying western counterparts, and manufacturing sectors are showing signs of revival in Montreal, Hamilton, Halifax and Winnipeg over the next few years.. However, growth in cities such as Ottawa, Quebec City and Victoria will be affected by ongoing public sector restraint.”
Changes in public policy flowing from political developments in specific provinces will, of course, need to be factored into future economic outlooks.
Coming off a 6.3 per cent increase in real gross domestic product (GDP) in 2011, Edmonton’s economy is forecast to expand by a still-robust 4.6 per cent this year. Economic growth is expected to come in at 3.8 per cent in Calgary in 2012. For the rest of the forecast period (2013 to 2016), Calgary’s average annual real GDP growth is expected to be 3.7 per cent, while Edmonton’s economy is forecast to average growth of 3.5 per cent annually.
Saskatchewan cities are also poised to grow strongly in 2012 and beyond – both Regina and Saskatoon are expected to be among the top metropolitan economies over the next four years. Regina’s economy will grow 3.7 per cent in 2012, lifted in part by the housing sector, as housing starts are forecast to hit a 36-year high this year.
Saskatoon’s economic growth will slow temporarily to 2.1 per cent, due to a slowdown in the services sector. But employment will rebound following a two-year pause, increasing by nearly 5 per cent, which will trim the unemployment rate. Moreover, Saskatoon’s housing starts are expected to reach a 30-year high this year.
An ongoing post-recession recovery in manufacturing and strength in construction will lead to an overall increase in real GDP of 3.1 per cent in Vancouver in 2012. Over the next four years, Vancouver’s economy will grow by 3.3 per cent annually, one of the fastest rates of growth in the country.
The Toronto economy is also benefiting from a continued recovery in the manufacturing sector, combined with a healthy housing market and a number of nonresidential construction projects. All in all, overall economic growth is expected to come in at 2.3 per cent this year. The medium-term outlook for the Toronto CMA is rosier – the economy is expected to grow by an average of 3.1 per cent annually for the next four years, the fastest pace of expansion east of Saskatchewan.
Winnipeg’s manufacturing sector is expected to expand for the first time since 2008. Combined with healthy gains in home construction, Winnipeg’s real GDP growth will accelerate from 1.3 per cent in 2011 to two per cent this year.
Hamilton’s GDP is forecast to expand by 2.5 per cent this year, thanks to renewed demand for steel and growth in several other manufacturing industries.
Québec City’s GDP will grow by 2 per cent this year. Continued employment growth and a relatively low unemployment rate remain attractive to newcomers, supporting population growth and housing demand. Work on a new NHL-sized arena recently began, which will boost construction output in 2013.
Montréal’s manufacturing sector is poised for 2.6 per cent growth in 2012, its best result since 2000. But a sluggish construction industry and slower growth in the services sector will limit overall economic growth to 1.2 per cent in 2012.
Lower housing starts, combined with a modest increase in consumer spending and fiscal restraint, will limit growth in Halifax’s economy to 1.7 per cent this year.
Fiscal belt-tightening and job cutbacks in the public sector are muting the outlook for two capital cities, Victoria and Ottawa-Gatineau. While Victoria’s goods sector is performing well, thanks to better results in manufacturing and in the primary and utilities sector, it is not enough to offset a sluggish services sector. As a result, Victoria’s economic growth will be limited to just 1.3 per cent this year.
With real GDP growth of one per cent in 2012, Ottawa–Gatineau’s economy is forecast to have the smallest increase among the 13 cities covered in this report. Ongoing fiscal restraint by the federal government will keep growth at bay not only this year, but over the next few years as well. By the time the federal government’s belt-tightening exercise comes to an end, the public administration’s share of the Ottawa-Gatineau economy will have edged down from 26 per cent in 2011 to 24 per cent in 2016.