Toronto leads economic growth of Canadian cities on manufacturing sector, condos

TORONTO – Toronto ranked as the fastest growing economy in the country last year, but a new study from CIBC suggests Canada’s biggest city will be hard pressed to maintain that growth trajectory.

The report on the economic strength of major Canadian cities, released Thursday, found Toronto ranked tops amongst its peers in the first nine months of 2012, helped by a recovery in the manufacturing sector and a surge in condo sales.

But those two factors could also be significant pressures on future growth in 2013.

“The coming year… will pose a major challenge to the city’s ability to maintain its current economic momentum,” said Benjamin Tal, deputy chief economist at the bank.

Tal said several factors could pressure Toronto’s growth, including a softening housing market, the end of many infrastructure stimulus projects by both federal and provincial governments and a slower pace of growth in the manufacturing sector.

Toronto has held the peak position in the CIBC report for two years.

The city’s growth momentum is partly from its broad economy, which covers many sectors, Tal said.

“Given that our index measures momentum as opposed to a level of activity, Toronto’s ability to maintain momentum for such a long period is impressive,” he added.

Second place was Calgary, boosted by new residents to the city and its healthy jobs market. The report found that consumer spending in Calgary has been strong, with retail sales up nine per cent over the past year.

Regina came in third place, driven by very strong population growth that makes it the fourth fastest growing city in the country with one of the country’s lowest unemployment rates.

“The city’s robust population growth has spurred housing market activity, with housing starts rising by a strong 80 per cent year-over-year in the third quarter,” Tal said.

“Regina is also supported by an improving manufacturing sector, with activity in 2012 estimated to outpace the national average for the second year in a row.”

Ranked lower on the list were Winnipeg, Saskatoon and Edmonton, coming in fourth, fifth and sixth place respectively.

Ottawa came in seventh while Quebec was 11th place for economic growth.