Thunder Bay to see Real GDP Rise by 1.4% in 2011
THUNDER BAY – Canada’s slowing economy will weigh on growth in most of the 27 census metropolitan areas (CMAs) covered in the Winter 2011 edition of The Conference Board of Canada’s Metropolitan Outlook. Only Windsor, Calgary, Oshawa, Regina, Saskatoon, London, Sherbrooke, Winnipeg, and Thunder Bay can expect higher real gross domestic product (GDP) growth this year than in 2010.
“Most Canadian cities rebounded well from the recession. This year, however, a weaker domestic economy, winding down of federal and provincial government stimulus measures, and uncertain economic conditions in the United States will result in stable or lower growth in a majority of cities,” said Mario Lefebvre, Director, Centre for Municipal Studies.
Thunder Bay is experiencing some solid growth in a number of areas. Livio Di Matteo, an Economist at Lakehead University shares, “The building permits issued by the City of Thunder Bay as reported by the Thunder Bay Community Economic Development Corporation (CEDC) provide an indicator on investment spending in the areas of residential, commercial, industrial and institutional investment. The total number of permits issued declined from 1990 to 2006 but since 2006 there has been an upward trend in the number of permits issued and 2010 –at 1,252 permits – represents the best year since 1993. Along with the number of permits, their total value is also important as an indicator of how much new investment spending is being injected into the local economy. The total value of permits exhibited a downward trend from 1990 to 2000 but since 2000 has also shown an increasing trend with some fluctuations. In 2010, 151.3 million dollars worth of permits were issued – up dramatically from 71.3 million dollars in 2009”.
Windsor is forecast to post the fastest growing metropolitan economy in 2011. Following growth of 3.5 per cent in 2010, real GDP is forecast to rise 3.9 per cent this year. Construction activity will receive a big boost when the $1.6-billion Windsor-Essex Parkway begins later this year. Nevertheless, GDP in 2011 will still be below 2007 levels and Windsor’s economy remains fragile. The battered manufacturing sector is convalescing and its level of activity remains below the peak reached in 2000.
Calgary’s economy will regain its place as one of the fastest growing CMAs in Canada over the next two years. The continued recovery in the energy sector will boost economic growth by 3.7 per cent in 2011 and above four per cent the following year, placing Calgary at the top of the growth leader board in 2012.
Growth to Moderate in Most Ontario Cities
Oshawa will post the third highest growth rate in the country this year, with GDP expected to rise by 3.5 per cent. Production increases at Oshawa’s General Motors plant will boost output in the manufacturing sector by 4.4 per cent.
Toronto’s real GDP is forecast to expand by three per cent in 2011, down from 4.3 per cent last year. Continued uncertainty south of the border, lower housing starts, and winding down of stimulus programs will slow growth from the 2010 pace.
At 5.8 per cent, Kitchener-Cambridge-Waterloo posted the second highest growth rate in the country in 2010. With more moderate growth expected in the manufacturing and services sectors this year, GDP growth will slow to three per cent.
London’s economy is forecast to increase by 2.8 per cent this year, thanks to growth in the services sector and gains in manufacturing activity.
Ottawa-Gatineau’s real GDP growth will slow to 2.4 per cent in 2011. The federal government’s departmental spending freeze will restrict growth in the region’s vital public sector. Employment in public administration is expected to fall by an average of 2.2 per cent annually both this year and next—a total of about 7,000 job losses.
Hamilton’s economy will increase by a more moderate 2.7 per cent this year, following growth of 4.1 per cent in 2010, the CMA’s strongest increase since 2000. Activity in St. Catharines-Niagara’s manufacturing and construction sectors is expected to cool this year, resulting in more moderate GDP growth of 2.3 per cent, down from three per cent in 2010. Kingston’s economic growth is expected to remain fairly stable at two per cent in 2011.
The end of the Vale strike helped Sudbury’s GDP to expand by an estimated 2.7 per cent in 2010. This year, real GDP is expected to increase by two per cent, with further gains expected in the primary and utilities sector.
Decent outlooks for Thunder Bay’s construction and primary and utilities sectors will boost real GDP by 1.4 per cent in 2011, the strongest growth in the CMA since 2000.
Di Matteo states, “However, the transitioning of Thunder Bay to a more knowledge intensive economy, opportunities in mining and a growing aboriginal population have seen investment activity pick up especially in the residential and commercial sectors”.
Western Cities to Benefit from Stronger Demand for Resources
Regina’s economy will benefit from the provincial resource boom and enjoy growth of 3.5 per cent in 2011. This growth will support employment increases and, in turn, maintain in-migration and demand for housing.
Saskatoon is poised to regain its position as one of Canada’s fastest-growing CMAs in 2011, with GDP forecast to rise 3.4 per cent. Saskatoon’s construction sector is expected to grow robustly through the medium term, and residential construction will continue to fuel activity in the finance, insurance, and real estate sector.
Higher oil prices helped boost Edmonton’s economy by 3.7 per cent in 2010. While GDP growth will moderate to 2.6 per cent in 2011, the CMA’s economy is expected to grow by four per cent in 2012.
Boosted by the Olympics, Vancouver’s economy rebounded from the recession with a 3.7 per cent expansion in 2010. Economic growth will slow to 2.8 per cent in 2011, mostly due to the winding down of government stimulus spending and uncertain demand for B.C. exports in the United States.
Real GDP in Victoria will grow by another 2.4 per cent this year, led by gains in non-residential construction and the services-producing industries.
Coming off a solid 4.3 per cent increase in 2010, Abbotsford-Mission’s economy is expected to expand by 2.2 per cent in 2011, in line with more moderate growth in the manufacturing, transportation and warehousing and business services sectors.
Strength across most sectors of Winnipeg’s economy will lift GDP by two per cent in 2011, following a modest rebound of 1.3 per cent in 2010. Winnipeg’s manufacturing sector is projected to expand by 3.5 per cent in 2011, and average gains of 3.2 per cent annually between 2012 and 2015.
Softer Infrastructure Spending to Limit Growth in Atlantic CMAs
St. John’s economy grew by 5.8 per cent in 2010, due mainly to increased infrastructure spending and the start of construction at the nickel processing plant near Long Harbour. With construction on the project having peaked in 2010 and growth in the services sector expected to moderate, the economy is expected to expand by 2.8 per cent in 2011.
Halifax’s economic growth will ease to 2.5 per cent in 2011, a full percentage point lower than last year, due to slowdowns in the housing market and in wholesale and retail trade. Saint John’s economy will be held back by a weaker construction sector; real GDP is expected to rise by just 2.2 per cent in 2011.
A Slowdown Anticipated in Quebec
After rising by an estimated 2.7 per cent last year, real GDP in Montréal will expand by a more modest 2.2 per cent in 2011. Lower housing starts and provincial tax increases will hamper growth in the CMA this year. However, Montréal’s manufacturing sector is expected to continue the expansion it started last year, as segments of the aerospace industry recover.
A rebound in Sherbrooke’s manufacturing sector and healthy gains in the services sector will lead to a 2.6 per cent increase in the CMA’s real GDP this year.
Following growth of 3.4 per cent in 2010, more moderate construction and services sector activity will limit growth in Quebec City’s economy to 2.3 per cent in 2011.
Led by growth in manufacturing and the services sectors, real GDP in Trois-Rivières and Saguenay will rise by 1.8 per cent and 1.5 per cent, respectively, in 2011.