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Oshawa to Post Growth of 3.2% for 2010

Vancouver is expected to top the podium in terms of economic growth among Canadian cities this year, according to the Conference Board’s Metropolitan Outlook – Winter 2010. “Only four Canadian cities posted economic growth of any kind in 2009 — Halifax, Saint John, Winnipeg and Regina,” said Mario Lefebvre, Director, Centre for Municipal Studies. “Fortunately, Canadian cities are on the rebound in 2010, although the pace of recovery will vary markedly.” This is the one annual Conference Board outlook where forecasts for all 27 CMAs covered in the Metropolitan Outlook are completed at the same time. Four CMAs — Oshawa and Ottawa-Gatineau in Ontario, and Edmonton and Saskatoon in the west — are forecast to post growth of 3.2 per cent in 2010.

After two years of declining GDP, Oshawa’s economy will benefit from the worldwide recovery now underway, especially in its key auto manufacturing industry. Housing starts are expected to double from 2009 levels, which will boost the construction sector.

Ottawa-Gatineau underwent a mild contraction last year, but still posted one of the better results in the country. In 2010, the high-tech sector should rebound modestly, while consumer spending already started to increase in the second half of 2009 and should continue to do so through this year. The federal government is expected to contribute to the CMA’s growth in 2010. However, a sizeable budget deficit is increasing the probability of softer growth in federal government spending over the medium term, which represents a risk to the outlook.

Edmonton’s economy declined in 2009 for the first time since 1991, and even though overall growth will rebound in 2010, the outlook for the job market remains modest. Housing starts have some ways to go before achieving a full recovery, but population growth continues to be steady in the CMA, which bodes well for residential construction over the medium term.

After two red-hot years, Saskatoon’s economy suffered a temporary reversal in 2009, yet employment continued to grow. Buoyed by strong population increases, the economy should return to a steadier and more sustainable pace of growth in 2010.

Toronto and Kitchener are expected to take silver and bronze positions, respectively. All sectors of Toronto’s economy are forecast to rebound in 2010, leading to overall real gross domestic product (GDP) growth of 3.5 per cent. Manufacturing output is expected to increase in Toronto this year for the first time since 2005. Improving manufacturing prospects are also expected to lead to growth of 3.3 per cent this year in Kitchener.

Vancouver is poised for a substantial rebound. In addition to the boost provided by the Olympic Winter Games, housing construction and consumer spending are forecast to rebound strongly this year.  Vancouver’s economy declined by 1.8 per cent in 2009, due to declining manufacturing output and faltering construction activity. The housing market started to rally in the second half of the year, and builders are expected to break ground on twice as many homes this year as in 2009. With economic growth of 4.5 per cent, Vancouver is expected to lead all Census Metropolitan Areas (CMAs) covered by the Conference Board.