Improved outlook for most small, medium-sized metropolitan areas: Report

But economic growth remains tepid
||Last Updated: 07/31/2014

The economies of most small and medium-sized metropolitan areas in Canada are expected to grow faster this year than in 2013, according to the Conference Board of Canada's Metropolitan Outlook: Summer 2014.

However, 11 of the 15 cities covered in the report can expect economic growth of less than two per cent this year. Only four cities — Abbotsford-Mission, B.C., Kitchener-Cambridge-Waterloo and Oshawa in Ontario and Moncton, N.B. — will see growth above two per cent this year.

"The recovery in manufacturing production is helping support growth in many of Canada's small and medium-sized metropolitan areas," said Alan Arcand, associate director of the Centre for Municipal Studies. "Still, economic growth remains muted.”

Breakdown by metropolitan areas

Abbotsford-Mission will have the fastest growing economy among the 15 cities. Following an increase of three per cent in 2013, real GDP growth will remain relatively steady at 2.9 per cent this year. Wood products manufacturing is benefiting from the recovery in the United States housing market, while growth in construction activity is being supported by a number of non-residential projects, said the Conference Board.

Moncton's economy is expected to see growth accelerate from 1.2 per cent last year to 2.1 per cent in 2014, thanks to a modest recovery in construction and decent gains in the finance, insurance, and real estate sector. Construction activity in Saint John is also improving modestly. This, along with healthy wholesale and retail trade output, will help support economic growth of 1.4 per cent in Saint John this year, an improvement over the 0.2 per cent gain last year.

Economic growth in St. John's, N.L., is forecast to slow sharply from 8.5 per cent in 2013 to 1.6 per cent this year. Last year, the economy was boosted by increased offshore oil production and significant gains in the construction sector, said the report. This year, growth in oil production will be relatively modest and construction activity is set to decline as work wraps up on the nickel-processing plant in Long Harbour.

Rebound in manufacturing activity providing slight boost to Southern Ontario. Kitchener-Cambridge-Waterloo's real GDP will grow by 2.5 per cent this year, as construction starts on a light rail transit system and local manufacturing output bounces back from a small decline in 2013.

Last year, Oshawa's economy was hampered by declines in manufacturing and transportation and warehousing. Both sectors are expected to improve this year as demand picks up both at home and in the U.S., lifting Oshawa's economy by 2.5 per cent in 2014.

Following modest growth of 0.6 per cent in 2013, real GDP in Windsor, Ont., is forecast to rise by 1.6 per cent in 2014. Local auto plants are benefiting from rising car sales in both Canada and the U.S., said the Conference Board.

Following a contraction of 0.1 per cent in 2013, real GDP in London, Ont., is forecast to increase by one per cent this year thanks to improvements in the services sector and a modest rebound in manufacturing activity. However, the economic growth will not be strong enough to generate new jobs, as employment in London is set to fall for the fifth time in seven years in 2014.

The combination of stronger manufacturing activity and steady gains in the services sector will allow real GDP growth in St. Catharines-Niagara, Ont., to improve from 0.6 per cent in 2013 to 1.2 per cent this year, said the report.

The economy of Kingston, Ont., will continue its recent trend of moderate growth this year, with real GDP forecast to expand by 1.2 per cent in 2014. The city's economy will be held back by declines in manufacturing and construction output, while growth in the services sector will be modest.

The ongoing recovery in Thunder Bay's forestry industry in Ontario will push up the city's overall economic growth to 1.5 per cent this year. In Sudbury, Ont., a rebound in manufacturing will offset slower growth in primary and utilities, meaning the economy will expand 1.1 per cent this year, little changed from the 1 per cent growth seen in 2013.

Cities in Quebec face another year of weak growth. Helped by a stronger U.S. economy and a slightly weaker Canadian dollar, manufacturing output in both Saguenay and Sherbrooke is set to improve in 2014, said the report.

Saguenay's economy will also benefit from steady growth in the services sector and a modest recovery in forestry, allowing real GDP to grow by 1.3 per cent in 2014. In Sherbrooke, the rebound in manufacturing output will help offset a decline in construction activity, resulting in one per cent economic growth this year.

Trois-Rivières' real GDP is forecast to fall 1.2 per cent this year, the fourth annual contraction in a row, as the closure of the Gentilly-2 nuclear plant continues to reverberate through the economy. On a positive note, new factory announcements and two new call centres will eventually help restore economic growth in Trois-Rivières starting in 2015, said the Conference Board.

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