Conference Board bullish on Hamilton

Posted on 25. Sep, 2010 by in News

The Spec, Paul Morse and Daniel Nolan, Fri Sep 24 2010

Hamilton is once again an economic tiger-town.

That’s the word from the Conference Board of Canada, which says the Hamilton census metropolitan area has the second highest rate of economic growth in Canada this year.

In addition, the city is on track to hit near or above $1 billion in building permits, a new record which will exceed the previous one set in 2008 by about $200 million.

The conference board expects Hamilton’s economy to grow by 4.5 per cent this year, the city’s strongest gain in a decade. Nationally, that growth is topped only by Toronto, which has increased 4.7 per cent.

Hamilton’s economic resurgence is fuelled by a strong recovery in manufacturing, construction and retail trade, although the board warns of an expected slowdown for the rest of this year and for 2011.

The city’s economic development director, Neil Everson, calls the growth report reasonable based on what he knows is going on in the local economy, such as the boom in the construction industry.

He credited the city’s move to diversify its economy over the last decade, and not rely on the steel industries, as a reason for the growth.

Everson said home construction is driving the building permit boost, but the industrial and commercial sectors have also been strong this year. He noted Canada Bread is spending $30 million to build a new plant in the North Glanbrook Industrial Park and a Stoney Creek firm, Janco Steel, is building a 70,000-square-foot addition.

“It’s a good mix,” said Everson. “The nice thing is they are all in different sectors of the economy. … If the economy doesn’t fall down or slow down, we should be close to $1 billion. We are definitely going to beat the (2008) record.”

The city’s previous building permit record in 2008 was $818 million, but Everson expects the last three months of 2010 will hit near or above $1 billion. He believes the city has already exceeded $818 million, but he does not have the exact figures yet. Last year, the city had $692 million in building permits despite the recession.

According to the report, Hamilton’s manufacturing sector is set to grow this year for the first time in eight years, while a big, positive turnaround in housing starts has lifted the area’s construction industry.

Toronto is expected to grow 4.7 per cent this year, the board says, with double digit growth in manufacturing and a big boost from government stimulus spending and housing starts.

“There is a lot of stuff happening,” Michael Klopchic, Bank of Montreal (BMO) vice-president of corporate finance, said yesterday.

“On the ground, we’re seeing big products, creativity, leading technology and doing projects that others aren’t capable of doing.”

An example is Bermingham, a long-standing Hamilton company that has technology that no one else has, Klopchic said. Bermingham Foundation Solutions is a leader in megaproject pilings and foundations.

“They are being pulled into projects in and out of the region that nobody else can complete, which is further contributing to the stimulus in the local economy.”

Klopchic said McMaster University is pulling investment and talented human resources into the region. “Something as strong as Mac is having a spillover into other sectors.”

Construction activity is also contributing to Hamilton’s recovery. BMO economists say housing starts were 17 per cent above year-ago levels in August, supported by a firm housing market that saw record average prices earlier in the year.

BMO also thinks the pace of growth will moderate given a softening housing market in recent months, the strong Canadian dollar and the sluggish recovery in U.S. demand.

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