Construction output poised to rise in most Canadian cities

OTTAWA—Growth in the construction sectors of cities such as Halifax, Ottawa, Toronto, Hamilton, and Winnipeg will contribute to modest economic expansion in those cities as 2015 wraps up, the Conference Board of Canada predicts in its report titled Metropolitan Outlook: Fall 2015, released Sept. 23.

Among Canada’s 13 major metropolitan areas, growth estimates range from a high mark of 3.4 per cent in Vancouver and 2.6 in Toronto and Winnipeg to a decline of 0.5 per cent in Calgary.

Of the 13 cities — Halifax, Quebec City, Montreal, Ottawa-Gatineau, Toronto, Hamilton, Winnipeg, Regina, Saskatoon, Calgary, Edmonton, Vancouver and Victoria — only Calgary and Edmonton will see economic declines for 2015, the Conference Board predicts.

Here are some trends the Conference Board foresees for a selection of cities:

— Halifax’s economy is expected to grow by 2.3 per cent this year, fuelled by strength in manufacturing and construction. Major projects boosting construction output include the $500-million Nova Centre in downtown Halifax, a new public library, new hotels, renovations and expansions at Dalhousie University and the King’s Wharf waterfront project. Both Shell and BP plan to spend more than $2-billion over six years on exploration offshore. The aerospace firm Pratt & Whitney will be spending $67 million on an engine facility near the Halifax airport. The Big Lift project on the Macdonald bridge, valued at $150-million, started this year.

All told, reports the Conference Board, construction output in Halifax is expected to rise by 11.5 per cent in 2015 and 10.4 per cent in 2016.

— GDP growth in Montreal will reach 2.1 per cent in 2015, thanks to the ongoing recovery in manufacturing and steady services growth. High-density residential housing seems overstocked with little new building planned so Montrealers are hoping non-residential construction will pick up the slack. Despite work on two mega infrastructure projects, the $4.2-billion Champlain Bridge replacement and the $3.7-billion Turcot Interchange, construction output is expected to drop for the third straight year, down 1.8 per cent in 2015.

— Ottawa-Gatineau’s GDP will grow by 0.7 per cent in 2015 as non-residential construction and high-tech services offset public sector weakness. There are numerous large non-residential projects in the works including the $2.1-billion Phase 1 of its light-rail transit (LRT) project, the $360-million Rideau Centre, the $200-million University of Ottawa Heart Institute, $190 million on the Government Conference Centre and $110 million for the National Arts Centre. Construction is forecast to climb by 2.9 per cent this year and by 3 per cent next year.

— Gains in the construction and services-producing industries will help Toronto’s economy expand by 2.6 per cent this year. Non-residential construction is expected to be busy. Major office building projects includes the Bay Adelaide Centre East, One York, and the Ernst and Young Tower (100 Adelaide Street West). Transit projects include the $5.3-billion Eglinton Crosstown light-rail transit, the $2.6-billion York Spadina subway extension and the $1.4-billion York Region vivaNext rapid transit system. The Conference Board also identifies major spending on retail projects such as a $331-million expansion at Yorkdale shopping centre, a $350-million redevelopment at Sherway Gardens, a $400-million expansion at the Eaton Centre and a $380-million renovation and expansion at Square One mall. Estimates are for overall construction output to expand by 2.8 per cent in 2015 and by 2.7 per cent in 2016.

— Non-residential construction, manufacturing and personal services will support GDP growth of 1.5 per cent in Hamilton in 2015. In the construction sector, McMaster University will be building a $118-million multipurpose building with classrooms, residences and other student spaces with work set to begin next year. The $138.9-million Randle Reef cleanup in Hamilton Harbour begins this year. All told, construction output is projected to expand by 1.9 per cent in 2015 followed by annual average increases of 3.5 cent through to 2019.

— Winnipeg’s GDP is expected to grow by 2.6 per cent in 2015 as services growth stays healthy and non-residential construction picks up with a predicted rise of 2.3 per cent in 2015, to be followed by a 4 per cent hike in 2016 as transportation investments gather steam. The city plans to spend $590 million extending the Southwest Transitway starting next year. Other expenditures will include $155 million spent on a railway underpass on Waverley Street at Taylor Avenue and $30-million on the UWinnipeg Commons, a downtown mixed-income apartment complex.