Manufacturing and services growth stunted in Hamilton, study suggests
Hamilton is facing a drop in manufacturing output and slow growth in the services sector, according to the Conference Board of Canada’s autumn metropolitan outlook.
But the report’s author says that’s about par with Ontario as a whole, and things in the city will improve moving forward.
“A lot of Ontario is seeing much slower growth,” said Jane McIntyre, the economist who compiled the report. “So I don’t think Hamilton is out of whack with everyone else.”
Hamilton’s GDP growth came in at 1.4 per cent last year, about middle of the pack nationally. The Conference Board forecasts that number will dip slightly in 2013 at 1.3 per cent before improving in 2014 and onwards to 2.3 per cent.
By contrast, Edmonton and Regina led major centres in Canada in 2012 at 5.9 and 4.7 per cent growth, respectively. Cities in the west are very strong right now, McIntyre says, “but that’s not to say the economies in Ontario aren’t growing.”
According to the Conference Board’s report, growth in Hamilton’s economy in 2012 was held back by weakness in the manufacturing sector, as well as declines in personal services and in public administration and defence.
“While both the personal services sector and the public administration and defence sector are expected to post modest growth this year, manufacturing output is forecast to drop by more than 2 per cent,” the report reads.
A 'steady decline' in manufacturing
Until the early 2000s, manufacturing made up a quarter of Hamilton’s economy, McIntyre says. The economic downturn shrunk that number down to about 16 per cent today, she added. “That share has steadily declined in the last ten years,” she said.
Lower demand, both at home and in the U.S., reduced manufacturing output in the second half of 2012 and through the first quarter of this year. Manufacturing output increased just 0.5 per cent in 2012, and is expected to contract by 2.2 per cent in 2013, the report reads.
“Over the coming months, a stronger U.S. economy should help to reverse this trend, as will the opening of Maple Leaf’s new $395-million processing plant in 2014, which will employ 670 people to make sliced deli meat and hot dogs,” the report reads. “Manufacturing output is forecast to increase by 3.9 per cent next year and 2.3 per cent in 2015.”
Projects like Maple Leaf Food’s new plant, as well as the construction of McMaster’s new downtown health campus and a new cargo facility at the Hamilton airport are all helping to drive a busy construction sector, the report says.
And while there is always an ebb and flow when it comes to construction, the board is seeing more non-residential construction in Hamilton than they have in years. That speaks to the city trying to revitalize the downtown core, McIntyre says.
“I think Hamilton’s in a good place right now,” she said. “That focus on development really bodes well for the area.”
Hamilton’s services sector is expected to grow by 1.9 per cent in 2013, a small improvement over the 1.7 per cent increase posted last year.