Toronto Economy Booming

Dennis Cuneo TorontoAccording to The Conference Board of Canada’s Metropolitan Outlook: Spring 2015 report, Toronto’s economic growth will soon top that of its Canadian peers for the first time in the 21st century.  The report says that the city’s economy grew in 2014 at its fastest pace in four years, and it’s expected to expand again by 3.1 percent this year.  If everything goes as predicted, Toronto will be the fastest-growing economy in 2015 among 13 cities covered in the report for the first time since 1999.

Toronto’s growth was boosted by gains in the manufacturing, transportation, warehousing and retail trade services, all sectors that are expected to improve again this year.  The city’s manufacturing output is set to grow by 2.8 percent, the sector’s fifth gain in six years.  According to the report, renewed strength in the global economy, low interest rates, falling oil prices and a weaker Canadian dollar have helped to increase demand for Toronto-made products.  The construction sector, which has seen declines in the past two years, is also expected to grow 3.8 percent in 2015, thanks to rising housing starts and the growth of downtown condominiums.  Consumer spending in Ontario is also predicted to climb with a return to positive employment growth and the upcoming Pan Am Games lifting the province’s tourism activity.

Ontario’s export industry is still robust, mainly since the US economy, which buys nearly 80 percent of the province’s exports, has been rapidly expanding.  The report states that the Canadian dollar’s slide in competition with the US dollar has been helping with Ontario’s competitiveness.  However, the outlook for Canada as a whole remains far from bright.  The plummeting prices in oil have been hitting the Canadian economy hard, particularly in the oil-rich regions of Alberta, Saskatchewan and Newfoundland and Labrador.  Overall, this has resulted in another year of unimpressive economic growth for Canada.  The sharp drop in oil prices will end up costing producers more than $40 billion (US) in lost revenue, although growth in other regions of the country is expected to offset these negative impacts.  The Canadian auto industry, which is based in Ontario continues to suffer from competition from Mexico, which continues to attract new auto assembly plants.