Winnipeg's growth rate cracks Canada's top 3
Board forecasts highest growth in nine years thanks to megaprojects, manufacturing
Fri Sep 14 2007
By Martin Cash
KEN GIGLIOTTI / WINNIPEG FREE PRESS archives
A busy construction industry, public-sector megaprojects and an over-heated Alberta market that is driving people back to Winnipeg is helping to generate the strongest economic growth rate in this city since 1998.
The Conference Board of Canada forecast released Thursday said Winnipeg will have the third-fastest-growing economy among the 13 largest cities in the country this year -- up from an eighth-place ranking last year.
While large-scale construction projects such as the Floodway expansion, airport terminal, Wuskwatim hydroelectric generating station and reconstruction of the Pointe Du Bois station are torching up the already busy construction sector, the city's manufacturing industry is also growing counter to the national trend.
Manitoba will gain 6,300 factory workers this year compared with last year while across the country the manufacturing sector is expected to shed about 75,000 jobs, according to the report.
"There is a lot of good news here," said Stuart Duncan, CEO of Destination Winnipeg, the city's economic development marketing agency. "This is as buoyant an economy as we have seen in this city for many years."
Ron Koslowsky, Manitoba vice-president of the Canadian Manufacturers & Exporters association, said the city's manufacturers have worked hard to meet the challenges brought on by low-cost international competition and a Canadian dollar that increased in value by 50 per cent over the last five years.
THE UPSIDE TO RED-HOT LOCAL ECONOMY
* Residential and commercial construction will increase by about 7.4 per cent in 2007 -- about half of last year's growth rate -- with housing starts 30 per cent higher than the year before and more than twice the average of the previous 10 years.
* Major infrastructure projects will boost construction through 2008. Manitoba Hydro projects slated for the medium term could keep construction activity high for many years.
* Fuel prices and environmental issues have increased bus ridership across North America, boosting the order books of both New Flyer Industries and Motor Coach Industries. Boeing Technology Canada is nearing record high employment in Winnipeg as the aircraft manufacturer gets ready to roll out its latest model, the 787.
THE DOWNSIDE TO RED-HOT ECONOMY
* The continuing tight labour market could constrain some growth in the future.
* If a slowdown in the U.S. economy occurs, as many analysts expect, many Winnipeg exporters could feel the pinch.
* Some analysts fear the economy is too reliant on public sector spending. Out of 10 sectors examined by the Conference Board, the largest increase in employment in 2007 will be in public administration.
Cross-Canada comparison
City Forecast GDP growth (2007)
1. Saskatoon 4.7% -- up from 2.6% (7th*)
2. Calgary 4.4% -- down from 7.7% (1st)
3. Winnipeg 3.7% -- up from 2.6% (7th)
4. Edmonton 3.6% -- down from 6.4% (2nd)
5. Regina 3.5% -- up from 1.9% (11th)
6. Vancouver 2.9% -- down from 3.7% (3rd)
7. Victoria 2.8% -- down from 3.7% (4th)
8. Toronto 2.7% -- up from 2.4% (9th)
9. Quebec City 2.6% -- down from 2.7% (6th)
10. Halifax 2.5% -- up from 2.1% (10th)
11. Ottawa 2.3% -- down from 2.8% (5th)
12. Montreal 2.1% -- up from 1.6% (12th)
13. Hamilton 1.3% -- up from 1.1% (13th)
* bracketed numbers represent ranking in 2006,
preceded by GDP growth rate in 2006.
Source: Conference Board of Canada
"At a recent board meeting everyone around the table mentioned they were busy in one way or another," Koslowsky said.
While there have been some casualties, Winnipeg's broad-based manufacturing sector has relied on cyclical upswings in demand for some companies and plucky competitiveness from others to increase shipments this year by three per cent,
"I am just amazed at the resiliency of our members," Koslowsky said.
For instance, Cascades Folding Cartons, a 50-year-old paperboard carton manufacturer has increased employment and sales by about 50 per cent over the last three years.
"We have worked on lean manufacturing processes for almost 10 years now and we've seen a dramatic increase in productivity," said Herb Vielhaber, company general manager.
Mario Lefebvre, director of the Metropolitan Outlook service at the Conference Board of Canada, said Prairie cities such as Winnipeg, Regina and Saskatoon had significant spikes in their ranking this year and at least some of the growth may well be sustainable.
For instance, Winnipeg is expected to have only minimal provincial out-migration this year (compared with a loss of about 6,000 people last year) and Regina and Saskatoon will experience net positive interprovincial migration.
"People are entering rather than leaving," Lefebvre said. "Housing is constrained, producing record-breaking housing starts, which means more people in the shopping malls and better manufacturing results. I'm not prepared to say that it will last forever, but there are strong fundamentals. The migration trends bode very well for the future."
martin.cash@freepress.mb.ca