Hamilton’s economic growth expected to hold steady as housing market slows

The latest Conference Board of Canada report shows Hamilton has steady economic growth on the horizon despite some signs that the red-hot real estate market and housing starts are easing up.

Alan Arcand, with the board’s Centre for Municipal Studies, says housing starts are expected to slow to about 2,700 units this year.

He says this follows a flurry of activity in the first quarter.

“That looks like it’s probably the peak. We think things will start to slow as we move through the year, partly due to the fact that the Ontario government announced new moves to cool the housing market,” he said, pointing to the non-resident buyers’ tax.

“You’ll still see high levels of activity,” he added. “It will just be slower.”

In Hamilton, Arcand says spin-off benefits tied to the housing market are evident with increased activity in the financial sector, insurance and retail spending.

“When people purchase a home they fill the home with furniture and other items.”

According to the report, manufacturing and tourism also remain strong, thanks in part, to a weaker Canadian dollar.

The Conference Board of Canada projects that manufacturing will grow by 1.3 per cent this year.

Two industries identified as “bright spots” in the forecast are transportation and warehousing.

The board says while these two sectors have contracted in three of the past five years, 2017 shows 2.1 per cent expansion.

“The port of Hamilton should have a good year, they’ve made some investments recently that should start to pay off, including a boat storage facility, flour mill and grain silo,” said Arcand.

Hamilton’s John C. Munro Airport is also expected to push growth, he says, with flights being added by both WestJet and Air Canada.

Overall, Hamilton is on pace for economic expansion of two per cent, both this year and next, the report says.

This is topped off by what the board considers modest employment growth with 2,600 new net jobs expected in 2017.