(WINDSOR, ON) – Windsor, along with many other southern Ontario cities, can expect to see its Gross Domestic Product fall this year. This is the latest economic prediction from Metropolitan Outlook, a look at local economies by the Conference Board of Canada.
Windsor’s economy is forecast to cool for the full year, with real GDP advancing by 2.1 per cent. This follows four straight years of growth exceeding three per cent.
One of the factors, said the Conference Board forecasters, is US light vehicle sales reaching a cyclical peak. With this peak in Windsor’s rear view mirror, slower manufacturing growth will result from less purchases from the customers of its automotive sector.
This declining demand is expected to be the main headwind to the city’s economic growth, with rising interest rates expected to play a secondary role.
On a positive note, employment is expected to bounce back from last year’s 1 per cent decline. If it does, the city could see a total of 4,700 net new jobs over the next two years.
But, this growth in new jobs will also bring more of the unemployed back into the labour market. Many won’t find work, which will cause the ballooning, ready to work segment to push the unemployment rate up by almost a full percentage point to 6.5 per cent.
Across the province economic conditions, “were strong in most southern Ontario cities last year, with many – including Toronto, Oshawa and Hamilton – hitting their highest growth rates in over a decade,” said Alan Arcand, an associate at the Conference Board. He expects the pace of expansion to moderate with rising interest rates, which will ultimately take a bite out of both consumer spending and housing market activity.
There are also a host of, “downside risks to the economy from abroad, particularly US trade and tax policy,” he said.
Despite all this, Toronto, Oshawa, and Guelph are expected to outperform all other cities in the province. Their real GDP growth will rank them in the top half of the 29 Canadian census metropolitan areas covered by the Conference Board’s Metro Outlook.
Vancouver will be the metropolitan economic growth leader in 2018, despite the fact economic growth is poised to slow.