Conference Board of Canada releases Metropolitan Outlook: Winter 2016
April 21, 2016 By The Conference Board of Canada
April 21, 2016 – Resource price weakness pushed the economies of Regina and Saskatoon into recession last year and will limit real GDP growth to just 1.1 per cent in 2016, according to The Conference Board of Canada’s Metropolitan Outlook: Winter 2016. On the other hand, Winnipeg’s economy is expected to expand at its fastest rate in 8 years, with a 2.5 per cent expansion forecast for 2016.
“Regina and Saskatoon are still struggling with wide-ranging economic softness caused by weak prices for oil and other commodities, and the recovery this year will only be gradual,” said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada. “On the other hand, Winnipeg’s economy and, in particular, its export-driven manufacturing sector is benefiting from a lower loonie and a healthy U.S. economy. Indeed, Winnipeg will be able to claim one of the fastest growing metro economies in Canada this year.”
- Regina’s real GDP growth is forecast to resume at a modest 1.1 per cent pace in 2016.
- Saskatoon’s economy will remain weak and grow only by 1.1 per cent in 2016.
- Winnipeg’s real GDP is forecast to expand by 2.5 per cent this year, which would be its fastest pace in 8 years.
- Vancouver’s real GDP is forecast to grow 3.3 per cent, making it the fastest growing economy among the 28 census metropolitan areas covered in this edition of the Metropolitan Outlook.
Regina’s economy is forecast to eke out a 1.1 per cent gain in 2016, following a 0.3 per cent decline in 2015. Regina’s manufacturing sector, which is closely linked to the province’s resources sector, is expected to shrink for the second consecutive year in 2016, due to continued weakness in commodity prices, especially oil. The area’s services sector is slowing along with the overall economy. Output growth for 2016 is expected to be 1.1 per cent, down from last year’s 1.9 per cent growth.
On a brighter note, output in Regina’s construction sector, after tumbling by 14.4 per cent last year, is expected to recover some of those losses and post 4.3 per cent growth this year. Although housing starts are forecast to fall this year, this will be offset by stronger non-residential investment activity, particularly in the government sector. For instance, $1.88 billion is being invested on a highway bypass that includes a dozen overpasses and about 60 kilometres of twinned highway, $278 million is being spent on a new football stadium, and $181 million is being invested to upgrade the city’s sewage treatment plant.
After contracting by 0.9 per cent in 2015, Saskatoon’s real GDP is expected to expand, but only by 1.1 per cent as the province’s economy continues to be weighed down by weak commodity prices. Employment will dip by 0.7 per cent, following a fractional gain in job counts in 2015.
The area’s manufacturing sector will see output fall by 2.9 per cent as weak demand from the oil patch outweighs export-boosting factors like a healthy U.S. economy and lower Canadian dollar.
Construction output is expected to expand by 2.1 per cent in 2016, propped by two major bridge infrastructure projects with a combined cost of $240 million. Also contributing to this growth is the construction of the $285 million Children’s Hospital of Saskatchewan, continued development at River Landing, and the mixed-use complex “The Banks,” which is set to open this spring.
Saskatoon’s services industry output growth is expected to ease from 2.3 per cent in 2015 to 1.3 per cent in 2016. A cooling local housing market underpins slowing, albeit still decent, growth in the finance, insurance and real estate sector in 2016, while lingering effects from a drop in retail sales last year will result in further cooling of wholesale and retail trade growth.
Winnipeg’s real GDP growth is forecast to hit an 8-year high of 2.5 per cent in 2016, up from 2.3 per cent in 2015. This will keep employment rising although the gain will slow to 1.4 per cent in 2016 from a 20-year high in 2015.
The city’s manufacturing sector is expected to grow by 3.1 per cent this year. New Flyer has won a US$223-million contract to provide 325 buses to the Massachusetts Bay Transport Authority and activity remains brisk in Winnipeg’s aerospace sector. Output growth in Winnipeg’s construction sector is also expected to pick up in 2016 to 3.7 per cent, thanks to heavy public infrastructure spending. In the housing market, a big pullback in multiple-units construction this year is expected to outweigh a jump in single homes, trimming total starts by 10 per cent to 3,800 units.
Meanwhile, the city’s services sector should expand this year at relatively the same pace as last year. Growth will remain brisk in the finance, insurance, and real estate sectors, supported by a balanced local resale market. The construction of a $200 million Outlet Collection mall will boost growth in Winnipeg’s wholesale and retail trade services.
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