City shone in recessionary '09 world

January 28, 2010
Winnipeg Free Press
Written by: Murray McNeill

WINNIPEG was one of Canada's economic stars in 2009, but it will have to settle for a supporting-actor role over the next five years, according to the latest metropolitan economic forecast from the Conference Board of Canada.

The Ottawa-based think-tank predicted Wednesday that when the final numbers are in, they'll show Winnipeg was one of only four Canadian cities to avoid a recession last year, with real gross domestic product (GDP) growth of 0.5 per cent.

That's expected to be the third best performance among the 27 Canadian cities included in Conference Board's forecast, with only Halifax and Saint John, N.B., doing better, at a projected 1.6 and 1.3 per cent respectively.

"While this (0.5 per cent growth) was a sharp deceleration from recent years," the board said, "it was still an impressive accomplishment given the worldwide economic downturn in 2009."

But the board also predicts it will be a different script for the next five years. Instead of being one of the country's growth leaders, Winnipeg will finish this year tied with four other cities for only the 16th best growth rate, at 2.5 per cent. And that's also where it will finish in the four-year period after that, with average annual growth of 2.9 per cent.

Despite the anticipated drop in rankings, the board's senior economist said Winnipeggers have nothing to be alarmed about.

Robin Wiebe said the city's population is growing at a record pace -- more than 16,000 newcomers over the last two years -- and the construction sector continues to boom, with its fourth consecutive year of double-digit output growth in 2009.

The city's economy is also expected to grow by three per cent in 2011 and 3.7 per cent in 2012, he said, which are healthy gains. And even this year's projected growth is "decent" by Winnipeg standards.

"So you're looking not too bad."

The vice-president of the city's tourism and economic development agency -- Destination Winnipeg -- also likes the way things are shaping up for Winnipeg.

"We're looking pretty healthy for 2010," Greg Dandewich said in an interview, adding that one of the reasons Winnipeg's economy won't grow as fast as that of some other Canadian cities is because it performed better than most in 2009.

"You've got to remember they're coming from a negative position and we're moving from a positive position," he said. "So they need to make up some ground."

The diversity of the local economy also makes it more stable and resilient than most, he said, which are good attributes to have.

Wiebe said there are still lingering concerns about the city's manufacturing sector, which recorded its biggest drop in output in nearly two decades in 2009, with a decline of 9.6 per cent.

Manitoba's private sector posted the third strongest labour productivity growth in Canada between 1997 and 2008, Statistics Canada says.

The agency said Wednesday that labour productivity in the province's business sector grew by an average of 1.9 per cent during the 12-year period.

Not only was that six-tenths of a percentage point better than the national average of 1.3 per cent, but the only two provinces to record stronger growth were Newfoundland and Labrador at 4.5 per cent, and Saskatchewan at 2.1 per cent.

Manitoba was one of only three provinces to see a drop in spending in bars and restaurants last November, according to Statistics Canada.

A total of $121.9 million was spent in food-services and drinking establishments in the province during the month, the agency said Wednesday. That was a decline of 0.4 per cent from October's total of $122.3 million.

Restaurant industry officials said the pre-Christmas period last year was slower than expected. They blamed that in part on a delayed fallout from last year's global recession.

murray.mcneill@freepress.mb.ca

Winnipeg statistics

What the Conference Board of Canada says about Winnipeg:

• Its economy put in the third best performance among 27 Canadian cities in 2009, with real GDP growth of 0.5 per cent. Was one of only four cities to avoid a recession last year.
• Its economy is expected to grow by 2.5 per cent this year and by 2.3 to 3.7 per cent from 2011 to 2014.
• Its population has been growing at a record pace over the last two years, with more than 8,000 net new arrivals each year, and is expected to continue growing at about one per cent a year for the next five years.
• Employment will grow by 0.8 per cent this year and by 0.6 to two per cent in the following four years.
• Housing starts will climb to 2,579 units this year from 2,039 in 2009, and rise steadily to 3,670 by 2014.
• Retail sales will rebound from a projected 0.9 per cent decline in 2009 to grow by 4.1 per cent this year and by 3.3 to 5.7 per cent from 2011 to 2014.

Republished from the Winnipeg Free Press print edition January 28, 2010 B5