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Press Release

Alberta and Saskatchewan cities to lead Canadian metropolitan areas in economic growth in 2012

Canada NewsWire

OTTAWA, Jan. 11, 2012 /CNW/ - Saskatoon, Calgary, Edmonton and Regina will benefit from solid global demand for their local resources to post the strongest economic growth among Canadian cities in 2012. The Metropolitan Outlook-Winter 2012, released today, is The Conference Board of Canada's once-a-year simultaneous analysis of 27 Canadian census metropolitan areas (CMAs).

"In spite of global economic turmoil, high prices for agricultural products, minerals and oil are likely to continue. Canada's prairie cities will reap the benefits of this global demand for commodities," said Mario Lefebvre, Director, Centre for Municipal Studies.

"The outlook is not as promising for cities in central and eastern Canada. The uncertain global economy, a continued slow recovery in the manufacturing sector and the windup of fiscal stimulus introduced by governments in recent years will hamper overall economic growth."

Resource Boom Boosts Prairie Cities
Saskatoon is forecast to lead the country in economic growth this year, but the four per cent increase in real gross domestic product (GDP) forecast in this edition of the Metropolitan Outlook is actually a slowdown from the estimated 4.6 per cent gain in 2011. The province's booming primary sector is supporting gains in all industries, and employment is expected to grow by almost five per cent this year.

Continued strong growth in Alberta's energy sector and solid domestic demand will boost Calgary's real GDP by 3.6 per cent in 2012. In 2013, the Calgary CMA is forecast to lead all Canadian cities with growth of 4.9 per cent.

The Edmonton economy created almost 40,000 jobs last year alone - a six per cent increase - which will help to support domestic demand entering 2012. Strong energy activity will also contribute to real GDP growth of 3.4 per cent in 2012.

Regina's economy grew by more than five per cent in 2011, second only to St. John's. Growth will ease to 2.9 per cent in 2012, which ranks Regina fourth among Canadian CMAs. Strong employment growth is drawing migrants to the city, boding well for housing demand and consumer spending.

Winnipeg is expected to rank in the top half of Canadian CMAs for economic growth in 2012. Winnipeg's manufacturing sector is forecast to post its best performance since 2007, which will help lift overall economic growth to 2.4 per cent in 2012.

Global Uncertainty Weighs Heavily on Ontario CMAs
Despite the slow U.S. recovery and the strong Canadian dollar, Toronto and Oshawa's manufacturing sectors are expected to post decent gains this year. Nevertheless, manufacturing output in both cities will remain well below peak levels. In addition, construction activity in both CMAs will be dampened by the winding down of public infrastructure spending.

Oshawa's manufacturing sector will receive a boost from the start of production on a new General Motors model. All in all, Oshawa's economy is expected to grow by 2.7 per cent in 2012.

Toronto's economy is forecast to grow by a 2.6 per cent this year, a modest improvement on 2011. As world markets recover, the Toronto economy should improve by four per cent in 2013, with growth widespread across all sectors.

Belt-tightening by the federal government will have a noticeable effect on Ottawa-Gatineau's 2012 outlook. Public administration employment fell by two per cent in 2011, and is forecast to decline by 3.6 per cent this year—a cumulative loss of 9,000 jobs over these two years. As a result, real GDP growth is expected to come in at a modest 1.8 per cent in 2012, only a slight improvement over 2011.

Kitchener-Waterloo's economy is expected to grow by 2.5 per cent in 2012. Although the region's manufacturing sector is in transition, it is expected to post another year of steady growth. The CMA will also continue to benefit from sound population growth, which will support housing demand and consumer spending.

The $1.4 billion Windsor-Essex Parkway project will lift overall economic growth in the Windsor CMA to 2.5 per cent this year. In addition to double-digit growth in construction sector output, employment is forecast to increase by an average of 2.3 per cent in 2012 and 2013.

Growth in Hamilton's manufacturing sector will be limited by the shaky global economy. Real GDP is expected to increase by two per cent in 2012, a slight increase from 2011.

London continues to face a slow recovery from the 2008-09 recession. Real GDP is forecast to increase by 1.7 per cent in 2012 (which is in itself an improvement over 2011), but this growth is still well below London's long-term annual average of 2.5 per cent.

Weakness in the construction sector will limit Kingston's economic growth to 1.5 per cent in 2012, the fourth year in the past five that the CMA's real GDP will increase by less than two per cent.

A drop in construction output will restrict economic growth in St. Catharines-Niagara to 1.4 per cent in 2012.

In the Northern Ontario CMAs, moderate growth in the mining and construction sectors will result in GDP growth of two per cent in Sudbury this year. Thunder Bay's real GDP is forecast to increase by 1.7 per cent in 2012, the highest growth rate in the CMA over the past 12 years.

Modest Growth Expected in Quebec
Quebec City's economy is expected to grow by 2.1 per cent in 2012, a modest acceleration in growth from last year's estimated 1.9 per cent advance. After a strong performance in 2011, construction output growth will ease this year before accelerating in 2013 - thanks to the planned construction of a new arena.

Montréal's economy will expand by two per cent in 2012, due in part to a third consecutive year of growth in the manufacturing sector. This will help offset an expected downturn in the construction industry.

Trois Rivières is expected to post real GDP growth of 2.6 per cent in 2012. The primary driver of growth will be Hydro-Québec's planned $1.9 billion refurbishment of the Gentilly-2 nuclear reactor, which is forecast to boost construction output substantially.

Sherbrooke's economy weathered the global recession better than many other Canadian cities. Manufacturing continues to recover from a lengthy downturn throughout the 2000s, but weaker construction output will limit Sherbrooke's real GDP growth to 1.8 per cent in 2012.

Saguenay's economy will expand by 1.5 per cent this year, its best performance since 2002. The CMA's manufacturing sector is expected to resume growth in 2012, boosting employment in the sector. The brightest development in Saguenay has to be the return of positive population growth in both 2010 and 2011. As a result, domestic demand has been stronger and should continue to expand in 2012, leading to an almost 2 per cent rise in overall services sector output.

Fiscal Restraint Slows Growth in British Columbia CMAs
A weaker outlook in the construction industry will hold real GDP growth to 2.6 per cent this year in Vancouver, down slightly from the estimated 2.9 per cent increase recorded in 2011. An expected decline in residential construction activity and the winding down of the federal government's infrastructure program will more than offset growth in the manufacturing and services sectors. Abbotsford-Mission will also feel the effects of lower government investment spending - the CMA is expected to post economic growth of 2.5 per cent in 2012, only marginally better than its 2011 performance of 2.4 per cent.

In Victoria, the provincial government's ongoing commitment to fiscal restraint - combined with declining output in the construction sector - will produce a 1.9 per cent increase in real GDP in 2012, the CMA's second consecutive year of growth below two per cent.

Growth in St. John's Tumbles in 2012
After two spectacular years, the St. John's economy has limited growth prospects this year. St. John's led the CMA growth rankings in both 2010 and 2011, thanks in part to 25 per cent annual average growth in construction output over that period. Waning offshore oil production wells, fewer housing starts, and the end of the infrastructure spending program will weaken economic growth to just 0.7 per cent this year, lowest among the 27 CMAS covered in the Metropolitan Outlook.

Halifax's real GDP growth will ease from 2.6 per cent in 2011 to 2.4 per cent this year. Activity at the Halifax Shipyard will decline in 2012 following two strong years. However, work on new naval frigates beginning in 2013 will help boost the outlook in subsequent years.

Saint John will post its second consecutive year of modest growth in 2012, with the economy forecast to expand by just 1.8 per cent. Although the services sector is forecast to post a decent gain, ongoing weakness in the construction sector is expected to hold growth back in the goods sector.

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