April 12, 2007
Ontario's economic growth stifled
Weakening growth in both the construction and services sectors, along with a mixed manufacturing outlook, will limit overall growth in Toronto and area.
In fact, Oshawa and Toronto are the only Ontario cities expected to rank in the top half of Canadian census metropolitan areas (CMAs) for economic growth in 2007, according to the Conference Board’s Metropolitan Outlook - Spring 2007.
“Despite modest gains this year, it will be 2008 before the manufacturing sectors in Ontario CMAs find a solid footing,” said Mario Lefebvre, director, Metropolitan Outlook Service.”
Although Oshawa’s key manufacturing sector is still struggling, improving conditions in the services sector and strong population growth will boost the CMA’s growth to 2.7 per cent in 2007 from 2.1 per cent in 2006.
Toronto’s forecast calls for a modest acceleration in real GDP growth from 2.1 per cent last year to 2.5 per cent in 2007, well short of the CMA’s economic potential.
Oshawa and Toronto are expected to get back on track starting in 2008, posting the strongest growth of all 20 CMAs covered in this edition of the Metropolitan Outlook over the medium term (2008 to 2011).
Kitchener’s manufacturing sector is shedding jobs, leading to subdued growth of 2.3 per cent this year. As the manufacturing sector begins to turn around in 2008, Kitchener can expect much better results over the next four years.
Ottawa-Gatineau’s economy cooled in 2006, but still surpassed the overall growth rate for the province of Ontario. With real GDP growth of 2.2 per cent in 2007, Ottawa-Gatineau will again outperform Ontario as a whole. Prospects are particularly bright for the high-tech sector, while the public sector is expected to resume hiring.
Weakness in Hamilton’s manufacturing industries weighed down an otherwise strong showing by other sectors in 2006.
With the key manufacturing industry still struggling, real GDP growth is expected to remain weak, at 1.5 per cent in 2007.
Kingston’s economy will also expand by a modest 1.5 per cent in 2007. Services sector growth is forecast to moderate from its 2006 pace, but a rebound in non-residential investment this year and next will support the CMA’s economy.
For the second straight year, Windsor is expected to post the slowest rate of economic growth among Canadian CMAs in 2007. Growth is expected to come in at only 0.7 per cent in 2007, on the heels of a 0.4 per cent increase in 2006.
Both the manufacturing and tourism sectors are facing difficulties, while the construction industry is doing its best to provide support.
DCN NEWS SERVICES
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