Hamilton's economy to make 'modest' gain of 1.3 per cent: report

Economic growth in Hamilton should improve this year and next alongside Toronto, Montreal and Quebec City, but will lag behind western Canada, according to The Conference Board of Canada's Metropolitan Outlook: Autumn 2014.

Hamilton's economy is forecast to grow by 1.3 per cent in 2014, up from a 0.2 per cent increase last year. The report attributes that growth to gains in the manufacturing sector and more activity in public administration.

That's a plus, seeing as the manufacturing output out of the city shrunk by 3.4 per cent last year because of slower domestic and foreign demand as well as the shutdowns at U.S. Steel. That drop in output came after four years of growth after the economic downturn through the 2000s.

"Fortunately, this time the weakness will not last as long," the report reads. Output in the manufacturing sector is expected to grow by 2.3 per cent in 2014, bolstered by Maple Leaf's new $395 million meat processing plant and stronger economic activity.

"We expect output to rise another 2.2 per cent in 2015," the report reads.

But for those gains, construction output is set to drop this year as non-residential construction projects finish up and housing starts weaken. In recent years, the construction sector has been busy with things like the aforementioned Maple Leaf plant, Tim Hortons field, cleanup of the harbour, the new headquarters for the school board and new office and commercial space downtown.

"Work is expected to be complete on most of these projects in 2014, but will be partly offset by some new projects scheduled for this year, including a new $44-million GO Transit station and some resurfacing of major highways in the area," the report reads. "Repairs were done to the Burlington Skyway as well, after a dump truck crashed into the bridge this summer."

Housing starts dropped by 8.8 per cent last year after gains the year before. The biggest decline was in single detached starts, which fell by 16.6 per cent. Housing starts are set to drop another 3.1 per cent this year, the report reads, but that's not expected to last, with gains coming in 2015.

Growth in the services sector remains modest too, the report reads, coming in at 1.4 per cent in 2013 and dropping 0.9 per cent this year. "At the same time, consumers have remained cautious even with big job gains in the fourth quarter of 2013 and the first quarter of this year, and so wholesale and retail trade output is forecast to remain flat in 2014," according to the report.

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