Canadian Manufacturing

Strong growth in manufacturing to buoy Southwestern Ontario economies in 2016

More than two per cent growth expected throughout region



OTTAWA—Southwestern Ontario’s mid-sized cities are expected to post healthy economic gains this year as the province’s manufacturing sector gets back on track, according to a new Conference Board of Canada report.

After a relatively stable 2015, most economies across the region are forecast to grow at a pace of two per cent or greater throughout the year.

“A healthy U.S. economy and weaker Canadian dollar have breathed some life into the manufacturing sector, especially Ontario’s auto sector, and this is helping support growth in many southwestern Ontario cities,” Alan Arcand, associate director of the Centre for Municipal Studies at The Conference Board of Canada, said.

In the Kitchener-Cambridge-Waterloo corridor, the Conference Board expects an economic expansion of 2.7 per cent, a slight bump from the 2.6 per cent experience in 2015. The gain will be driven by infrastructure projects, as well as by the region’s diverse manufacturing base. The manufacturing industry specifically is poised to add 2.1 per cent through 2016, largely as a result of developments at Toyota’s Cambridge plant, expansions by drone maker Aeryon Labs, Grand River Foods, and Blackberry’s push into driverless car technology.

London meanwhile is poised to expand by 2.2 per cent this year—manufacturing will lead the way with three per cent growth. The region has its auto parts manufacturers is thank, in part, for the growth; the industry is benefiting from strong vehicle sales south of the border, as well as a lower Canadian dollar.

East of Toronto, Oshawa’s economy will also see modest growth of two per cent in 2016.

“The local manufacturing sector will get a bit of a reprieve in 2016, as General Motors has decided to keep producing the Chevrolet Equinox in Oshawa through at least 2017,” the Conference Board said.

Manufacturing output in the city is expected to jump by 1.8 per cent as a result of the lower dollar growing U.S. economy.

At the U.S. border, Windsor will also experience two per cent growth this year, as the auto manufacturing sector again contributes strong gains. The Conference Board expects the city’s manufacturers to expand by 3.6 per cent throughout 2016—a notable contributor to the growth being Fiat Chrysler’s recently-completed $3.7-billion investment in its Windsor minivan plant that will begin churning out new vehicles.

Finally, in St. Catharines and Niagara regions, the economy is poised to continue its slow but steady growth. Manufacturers are expected to add two per cent to the economy, which is forecast to gain 1.6 per cent over the course of 2016.

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