Hamilton’s economy bouncing back

Posted on 09. Apr, 2010 by in News

April 08, 2010
Steve Arnold
The Hamilton Spectator
(Apr 8, 2010)
Hamilton is poised for its strongest economic growth in a decade.

The Conference Board of Canada is predicting Hamilton’s economy will grow 3.3 per cent this year — its best performance since 2000 and the third-fastest growing city economy in the country.

At the same time, the Realtors Association of Hamilton-Burlington reported the real estate market is booming, with March sales up 38 per cent over the same month last year and the average price of $335,633 up almost 21 per cent.

The Conference Board report says the only key number that’s not going up for Hamilton in the next five years is the unemployment rate — it’s set to fall by almost half by 2014.

Hamilton’s growth will trail only Vancouver’s post-Olympic 4 per cent and Toronto’s 3.7 per cent.

The rosy report, released yesterday, matches the business outlooks the city’s economic development staff have seen, said Norm Schleehahn, manager of business development.

“Our numbers would certainly agree with that trend,” he said.

The Conference Board, an Ottawa-based think-tank, takes the economic temperature of Canada’s largest cities throughout the year. The most recent review for Hamilton projects growth in all sectors — including the battered manufacturing segment, where output and employment have fallen every year since 2003, bleeding more than 17,000 jobs, or 22 per cent of its workforce. More than 7,000 jobs were lost in the last two years alone.

The report notes: “Manufacturing output posted positive growth in the final two quarters of the year, as global demand picked up. And this strength is expected to continue through 2010 as well, despite the ongoing challenge posed by a strong Canadian dollar.”

In total, the board predicts manufacturing output in Hamilton will increase 4.4 per cent this year as the auto and construction sectors pick up, boosting the steel industry especially.

The improvement will continue next year, adding another 4.3 per cent in growth.

In Hamilton, those numbers are backed up by announcements such as the new coffee roasting plant of Tim Hortons, the Canada Bread bakery and Metro Freightliner’s decision last year to consolidate its Stoney Creek and St. Catharines transport truck sales and service operations here, said Schleehahn.

That move, he added, was one of three where new companies moved into space vacated by firms that had downsized because of the recession.

“Even in bad times, some people were investing,” he said. “That was happening from big companies all the way down to the small business operator.”

One segment that will be especially important to Hamilton’s improved outlook is construction — a turnaround from 2009 where housing starts dropped by almost half to a 27-year low and output for the sector dropped by 10 per cent.

This year, the board predicted new housing activity will improve by 30 per cent, with starts rising to 2,420 from last year’s 1,860.

Also boosting the sector will be $7.1 million in federal and provincial affordable housing projects and ongoing work including $290 million in hospital renovations, work on several roads, water treatment facilities and sewers as well as the CANMET Materials Technology Laboratory at the McMaster Innovation Park.

There are more potential gains from the proposed light-rail transit system and developments for the 2015 Pan Am Games awarded to Toronto and Hamilton.

The realtors’ association report for March shows sharp increases over the same month in 2009 and steady increases through the first three months of this year.

“March was just an amazing month for numbers of listings and sales,” association president Joe Ferrante said in a news release.

“We set a new record for the number of listings taken in a month, ever.”

Specifically, the Hamilton-Burlington area saw 1,436 units sold in March, an increase of 38.2 per cent over March of last year and 29.4 per cent over February.

To date, the board reported unit sales are 45.7 per cent higher than the same period in 2009 and listings are up 21.5 per cent.

Ferrante said the pace is expected to continue through the spring, although hikes in mortgage interest rates may cool the market slightly.

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