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Western Canadian cities best in 2006

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by Journal Of Commerce

“Vancouver and Victoria are also near the top of the rankings, implying that western Canada will boast five of the six strongest economic performances this year among metropolitan economies. Eastern Canadian cities will have to wait until 2007 to move closer to the top of the growth rankings.”

ECONOMY

For the second consecutive year, Calgary, Edmonton and Saskatoon will lead Canadian cities in economic growth in 2006, according to the Conference Board’s Metropolitan Outlook - Autumn 2006. “Strong energy sector activity is the starting point for healthy gains in most industries in Calgary and Edmonton,” said Mario Lefebvre, Director, Metropolitan Outlook Service. “Vigorous activity in the minerals sector will allow the Saskatoon economy to post its third consecutive year of rapid growth.”

“Vancouver and Victoria are also near the top of the rankings, implying that western Canada will boast five of the six strongest economic performances this year among metropolitan economies. Eastern Canadian cities will have to wait until 2007 to move closer to the top of the growth rankings.”

Calgary’s economy, which grew by 5.7 per cent last year, is expected to expand by a stunning 6.6 per cent in 2006. Edmonton’s real gross domestic product (GDP) increased by 5.3 per cent last year and is forecast to grow by 5.9 per cent in 2006. Saskatoon’s growth, while falling off slightly in 2006, is still expected to come in at a healthy 3.8 per cent.

Quebec City will post its second consecutive year of strong growth in 2006, at 3.7 per cent.

A number of major non-residential construction projects will lift growth in the goods-producing sector, while sound job creation will provide a boost to consumer spending.

Vancouver’s construction sector -on both the residential and non-residential front- will combine with solid consumer spending to generate real GDP growth of 3.5 per cent in 2006.

Victoria is also enjoying strong construction activity and employment growth, allowing the economy in the Census Metropolitan Area (CMA) to expand by 3.3 per cent this year.

The construction industry will also be an important contributor to economic growth in Winnipeg in 2006, where real GDP growth is forecast to reach 3.1 per cent.

Regina will see its real GDP growth slow from 3.1 per cent in 2005 to 2.3 per cent in 2006. While the manufacturing and construction sectors continue to hold their own, weak consumer spending is slowing activity in the services sector.

Manufacturing sectors in most Ontario cities are still dealing with the effects of a strong Canadian dollar.

At 3.2 per cent, Kitchener is anticipated to post the fastest growing economy this year among Ontario CMAs covered in this edition of the Metropolitan Outlook.

Oshawa, Toronto and Ottawa-Gatineau are each expected to grow by 3 per cent this year, while Windsor, Kingston and Hamilton are forecast to grow by 2.1 per cent.

Even better days are ahead for Oshawa and Toronto.

Due in part to steady population grow and a slowly-improving manufacturing sector, Oshawa is poised to top all Canadian CMAs in average annual growth between 2007 and 2010, with Toronto ranking second during this period.

Halifax and St. John’s will pace CMAs in Atlantic Canada this year, posting growth of 3.2 per cent and 3.1 per cent, respectively.

Domestic demand in Halifax is alive and well and is lifting overall economic growth this year. Much of the same is expected for next year.

St. John’s is rebounding from two weak years, thanks in part to increased provincial spending by the Newfoundland and Labrador government.

The Saint John economy will continue to struggle this year, with growth expected to come in at a modest 1.8 per cent, on the heels of zero growth in 2005.

Montreal’s economy is still sluggish. Following an average annual increase of 2 per cent per year from 2001 to 2005 inclusively, real GDP growth in the CMA is forecast to come in at 1.9 per cent in 2006.

The manufacturing sector was and still is limiting overall growth in the CMA significantly.

Much the same holds true in Saguenay, where a struggling manufacturing sector, combined with a declining population, is keeping a lid on growth, which is set to reach a modest 1.5 per cent this year.

The Metropolitan Outlook, published quarterly, includes economic outlooks for 27 Canadian CMAs, their province and Canada.

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