Windsor's economic rebound riding high, say experts
Companies need to diversify beyond auto sector in order to sustain Windsor's economic prosperity, say experts
With unemployment numbers steadily dropping, a booming housing market and the revival of the city's automakers, Windsor has become one the biggest economic success stories in the country, say experts.
The plummeting unemployment rate stands as one of the most shining examples of Windsor's turnaround, according to Alan Arcand, with the Centre for Municipal Studies at the Conference Board of Canada.
- Homes hard to come by in Windsor's sizzling housing market
- Windsor unemployment rate drops to 4.9% in April
Figures released Friday from Statistics Canada show unemployment in the city fell to 4.9 per cent, which is a far fall from the 10 per cent the city was at just 15 months ago, back when Windsor held the unflattering title of being the unemployment capital of the country.
Windsor now sits well below the national jobless rate, which dropped slightly on Friday to 6.5 per cent.
A large part of that stems from a rebounding manufacturing sector led by the automotive industry, Arcand explained. Vehicle sales in the U.S. have rebounded, which is a huge boon for Ontario.
"The pace of sales is very good for Ontario's auto sector, including Windsor," he said. "We export nine out of 10 vehicles that we make to the U.S."
Diversify beyond automotive
But economists who attended a business outlook workshop in Windsor on Friday say relying on the auto sector can be dangerous for a healthy economy.
Tool and mould company Laval International has expanded its business beyond the automotive sector in order to avoid hitting massive lulls when the economy dips, explained president Jonathon Azzopardi.
"We knew about diversification. We started diversifying back then (in 2006)," he said. "It's not an easy thing because it's uncomfortable, it's different, it's unfamiliar, but we have to do it. If we want to continue these trends — this hot market we're in — we can't rely on automotive entirely."
One threat to Windsor's ongoing success could also be threats from U.S. President Donald Trump to tear up the North American Free Trade Agreement, which may have manufacturers worried.
That topic was the focus of another talk Friday at the University of Windsor's Cross Border Institute. Christopher Sands, director of the Center for Canadian Studies at Johns Hopkins University in Baltimore, says there is a certain level of anxiety in an auto town like Windsor.
"I think we should be worried in part because the auto industry has such highly integrated value chains that cross borders," he said. "Changing the rules, potentially, raises a lot of uncertainty. I think it's going to lead a lot of manufacturers to worry."
Even if Trump backs down from his threats, the anxiety among manufacturers could be harmful on its own, according to Sands.
But there could also be some benefits to renegotiating NAFTA, he said. One of those changes could include coming up with ways to make it easier to send products back and forth across the Canada-U.S. border by improving regulation standards for products like vehicles.
"Canadian and American standards may be different, but functionally they achieve the same things," he said. "So, if you can get a product approved in your own market, you don't have to do it again in the next one. That fits with Donald Trump's ambition to cut red tape, especially for business."