Vancouver expected to show strong growth for 2010
Postmedia News September 23, 2010 Vancouver is expected to be one of Canada's fastest-growing economies this year, out-pacing gross domestic product gains in other major cities as well as in Canada as a whole.
While Toronto, Hamilton and Saskatoon top the Conference Board of Canada's Metropolitan Outlook for Autumn 2010 in terms of growth, both Vancouver and Victoria will also perform well.
Canada's real GDP is expected to rise by 3.6 per cent in 2010, after dropping 2.5 per cent in the midst of last year's recession, but the board expects Vancouver to register 4.3-per-cent growth this year and a further rise of 3.4 per cent in 2011.
Victoria is forecast to see its GDP jump 3.3 per cent this year, and 2.6 per cent in 2011.
Toronto will lead the country with economic growth of 4.7 per cent, followed by Hamilton at 4.5 per cent -- both cities recovering from substantial losses last year.
The 13 major metropolitan areas studied are all expected to post growth this year before slowing again in 2011 as consumers rein in spending and government stimulus programs wind down. Edmonton and Calgary will have to wait until 2011 before fully recouping last year's losses.
Canadians have recovered from their "recession blues," with consumer spending helping to bring the country out of the recession, the board says.
"All of the elements required were present: low financing rates, a turnaround in employment, a recovery in consumer confidence, and a reversal of wealth effects, thanks to the turnaround in Canadian equity markets and a recovery in real estate values," the report says, adding that household spending has outpaced income, and that can't last.
"Household debt as a share of income continues to swell-- a factor that will hold back spending as increasing lending rates boost the cost of carrying debt.
"These conditions set the mood for much weaker growth in consumer spending over the second half of 2010 and into next year.
"Pulling back hard on the reins of spending starting next year and a softening in the pace of global economic growth, the rise in Canada's overall GDP will soften from the expected 3.6 per cent this year to an anticipated 2.9 per cent in 2011."
Consumer spending and a recovery in the manufacturing, construction and services sector are expected to play a role in most cities' continued gains, the board said.
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