Construction is leading Hamilton’s economic growth, and the city is in store for a sunny 2014, shows a new report from economists and business leaders on the state of the city's economy.
Non-residential construction was a major economic driver in 2013, creating jobs and keeping Hamilton’s unemployment rate below the provincial average, shows a new outlook compiled by Credit 1 Credit Union and the Ontario and Hamilton chambers of commerce. The construction was driven by projects such as the Pan Am Stadium or McMaster’s new downtown campus.
The city issued more than a billion dollars worth of building permits in 2013. As it stands, that won’t slow down in 2014, said Neil Everson, head of the city's economic development department. But this time, it will be residential properties.
“We have 15 condos on tap for 2014,” he said.
That’s 15 new buildings, mostly in the lower city and downtown core, that developers have applied to the urban renewal branch for, he said. That accounts for upwards to 1,400 new condo units.
“Migration from the GTA toward Hamilton is driving this,” Everson said.
With new transit infrastructure expected, Everson believes filling those units won’t be an issue.
With a 1.3 per cent industrial building vacancy rate – what he describes as very low – the city also needs new space for commercial and industry ventures, while keeping costs affordable.
“Industry is mobile,” he said. “They’re looking for the most cost effective location.”
The new Maple Leaf Foods and Canada Bread plants in Stoney Creek are some examples of that, the report says. It also cites agri-food industry as another significant driver for the area.
On a broader scale, Hamilton had a “moderate to modest growth outlook” in 2013, said Helmut Pastrick, Central 1 Credit Union's chief economist.
The Regional Economic Outlook includes Hamilton and the Niagara Peninsula. It sites employment growth of 15,000 new jobs over the next two years in the region.
Agribusiness and construction were the main economic drivers in 2013.
Average housing prices are expected to rise to $343,000 by 2015.
“Hamilton ranks reasonably well” compared to similar-sized cities such as Windsor, Ottawa or London, he said.
“With Hamilton in near proximity to Toronto, a strong performer since the recession, it could benefit from the spin-off.”
That’s increased migration from residents of the GTA looking to take advantage of affordable real estate in Hamilton but choosing commute to Toronto for work, he said.
Manufacturing: Hamilton’s long-standing industry
While the manufacturing industry contracted in 2013, Pastrick said there is a “base for optimism in the future.” Economists predict the declining Canadian dollar will boost our gross domestic product (GDP).
“That’s going to help move manufacturing back to Hamilton,” agreed Keanin Loomis, CEO of the Hamilton Chamber of Commerce. “If [manufacturing] is going to stay in Canada, it will be in southern Ontario.”
But a shift to a knowledge-based economy, which is happening in Hamilton with McMaster’s Innovation Park and growth in the life sciences, will no doubt continue, Everson said. Diversification of industry has been a focus for the city’s economic development department since amalgamation in 2001.
Loomis believes a good indicator of further economic growth is the private versus public investment around the city.
“I’m seeing all these cranes downtown from my office and they’re all associated with private sector investment,” Loomis said. “That’s where we have a tipping point.”
But Loomis is cautiously optimistic. Even with seemingly positive gains around the city, he said, Hamilton still hasn’t hit its maximum potential yet.
“I’m not declaring victory,” he said.