Thunder Bay and Sudbury – Modest Economic Growth

Business in Thunder Bay

Business in Thunder BayTHUNDER BAY – BUSINESS – Sudbury and Thunder Bay can expect positive but modest growth of around 1 per cent in 2016, according to The Conference Board of Canada’s Metropolitan Outlook: Winter 2016.

“Sudbury and Thunder Bay faced difficult economic conditions in 2015 and weak resources prices will continue to weigh on their economies this year. Though both cities will see positive economic growth this year, it will be modest at best,” said Alan Arcand, Associate Director, Centre for Municipal Studies.


  • Following two years of declines, Sudbury’s economy is forecast to expand by
    1 per cent in 2016.
  • Thunder Bay’s economy will continue to expand in 2016, albeit by a modest
    1.1 per cent.
  • Vancouver will be the fastest growing metropolitan economy in Canada in 2016, with growth of 3.3 per cent.

Thunder Bay Overview

Thunder Bay’s real GDP is forecast to grow by 1.1 per cent in 2016, up fractionally from its 2015 gain of 1 per cent. A soft Canadian dollar and healthy U.S. economy should boost Thunder Bay’s forest products sector and the manufacturing industry more generally. The manufacturing sector will also continue to benefit from the work that is resulting from Bombardier’s contract to supply streetcars to the Toronto Transit Commission. In all, manufacturing output should rise by 1 per cent in 2016. A similar gain is expected in construction output, thanks in part to a projected rise in housing starts. Modest improvements in non-commercial services, in finance, insurance, and the real estate sector, and in business services will help lift total services output by 1.1 per cent in 2016.

Following two consecutive annual declines, employment in Thunder Bay is forecast to bounce back with a 2.5 per cent increase in 2016. However, our forecast calls for the labour force to expand at an even faster pace, leading to a modest rise in the unemployment rate to 5 per cent.

Greater Sudbury
Continuing soft nickel prices will remain a drag for Greater Sudbury, where mining is one of the big drivers of the economy. While the low Canadian dollar is helping to cushion some of the blow of soft nickel markets, Sudbury’s nickel mines will continue to struggle in 2016. Smaller local firms like KGHM and First Nickel have already made cuts. On a more positive note, the $11 million deal signed between Lonmin Canada and Wallbridge Mining Company will see the development of the Parkin properties, a nickel, copper, and platinum play. In all, the local resources, agriculture and utilities sector is expected to post output growth of only 1 per cent in 2016. At the same time, a solid rise in housing starts will fuel a second straight annual gain in total construction output. Add to that a slight improvement in services sector activity and Sudbury’s economy is poised to expand by 1 per cent in 2016.

Unfortunately, the economic gains will not be strong enough to generate job growth. In fact, employment is forecast to fall by 0.7 per cent in 2016, the second decline in three years. But with the labour force also declining, the unemployment rate is only expected to tick up from 7.1 per cent last year to 7.2 per cent this year. 

Metropolitan Outlook: Winter 2016, is The Conference Board of Canada’s once-a-year analysis of 28 Canadian census metropolitan areas (CMAs).

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