Modest economic outlooks for Saguenay and Trois-Rivières in 2016; solid prospects for Sherbrooke

OTTAWA, Aug. 10, 2016 /CNW/ - Economic growth in Saguenay and Trois-Rivières is expected to remain modest, while it is forecast to be fairly strong in Sherbrooke, according to The Conference Board of Canada's latest Metropolitan Outlook.

"Sherbrooke's economy is expected to maintain its positive momentum in 2016 with an expansion of 1.9 per cent, outpacing the national average for the second consecutive year," said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada. "On the other hand, the outlook for Saguenay and Trois-Rivières is more modest, with economic growth forecast to reach 1 per cent in the former and 1.3 per cent in the latter."

Highlights

• Saguenay's economy is forecast to expand by 1 per cent this year, an improvement over 2015's 0.2 per cent growth.
• Trois-Rivières' real GDP is set to grow by 1.3 per cent in 2016, down from a 1.5 per cent gain last year.
• Sherbrooke's economy is forecast to outpace the national average for the second straight year, posting real GDP growth of 1.9 per cent in 2016.
• Among the 15 cities covered in the report, Kitchener, Oshawa, and Abbotsford-Mission will have the fastest growing economies this year.

Saguenay's real GDP is on track to expand by 1 per cent this year, a modest increase by provincial standards, but still its best performance since 2012. A somewhat better outlook for the aluminum industry–a key driver of growth in the city's manufacturing sector–and decent gains in the services-producing industries are contributing to Saguenay's improved outlook. However, tepid prospects for the mining and construction industries will keep a lid on the city's growth over the short term. In fact, housing starts are projected to decline for the fourth straight year in 2016, falling to a 12-year low of 475 units. On the bright side, employment is expected to expand by 1.7 per cent this year, rebounding from a 0.8 per cent contraction last year.  

Trois-Rivières' economy is projected to climb by 1.3 per cent this year, led by solid gains in manufacturing, business services, and finance, insurance, and real estate. The city's manufacturing sector is expected to receive a boost from both Olymel's recent acquisition of La Fernandière and the construction of the Champlain Bridge in Montreal, which will help local steel manufacturers. Meanwhile, a stable outlook for housing starts and healthy non-residential investment activity will drive growth in construction and indirectly in finance, insurance and real estate. On a negative note, primary and utilities output is on track to fall for the sixth consecutive year, as the industry continues to reel from the closure of the Gentilly-2 Nuclear Generating Station in 2012.

Sherbrooke's economy is set to outpace the national average once again, posting real GDP growth of 1.9 per cent in 2016. Output in the city's manufacturing sector should remain strong at 4.9 per cent, thanks to the combination of a weaker Canadian dollar and moderate U.S. demand. At the same time, Sherbrooke's services sector is forecast to grow by 1.4 per cent this year, as the business services sector continues to benefit from activity generated through the strong partnership between academic institutions and businesses in the region. On the other hand, construction activity is expected to remain sluggish this year, largely due to a soft new housing market. However, Sherbrooke has recently given the green light to build a $45-million health complex, and this project should provide a boost to the construction industry later this year and into 2017. Despite this positive economic outlook, job growth is forecast to slow sharply from 3.2 per cent last year to just 0.3 per cent this year.

Released today, Metropolitan Outlook: Summer 2016, is The Conference Board of Canada's analysis of 15 Canadian census metropolitan areas (CMAs).

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SOURCE Conference Board of Canada

Yvonne Squires, Media Relations, The Conference Board of Canada, Tel.: [phone] ext. 221, E-mail: [email protected]; Juline Ranger, Director of Communications, The Conference Board of Canada, Tel.: [phone] ext. 431, E-mail: [email protected]