WATERLOO REGION — Strong manufacturing growth will give Waterloo Region the highest economic growth in Canada among medium-sized cities in 2012, says a new report from the Conference Board of Canada.
The region’s gross domestic product will grow by 3.3 per cent this year, down from 3.9 per cent in 2011, the board said.
Oshawa also will record economic growth of 3.3 per cent this year, the board said.
The report was released the same day that Research In Motion announced it will cut 5,000 jobs globally by the end of fiscal 2013. In a “forecast risk” note near the end of the report, Conference Board analysts wrote that “deteriorating conditions at RIM could have widespread negative effects.”
Unemployment in Kitchener, Waterloo and Cambridge is projected to fall to 6.7 per cent from 6.8 per cent in 2011, and 6.2 per cent by the end of 2013, according to Conference Board senior economist Robin Wiebe.
As someone who lived in Kitchener between the late 1960s and the late 1980s, Wiebe said he knows the region’s manufacturing base has always been diverse. That has ensured its survival in a high dollar, high wage environment, he said.
“When I was there, it was more boots and skates — Bauer was there, Greb was there, Kaufman was there . . . 30 years later, only the nature of manufacturing has changed,” Wiebe said. “Now they’re building satellites. Now they’re building cars.”
He projects that the region’s manufacturing output will increase 4.5 per cent this year, marking the third positive year in a row for the sector after four straight years of decline between 2004 and 2008.
Wiebe points to potential job creators like Toyota, which may expand production of its Lexus RX 350 luxury SUV in its plant in Cambridge, and Eclipse Automation, which just opened a new custom welding facility in the same city.
The start of work on the light rail transit system in 2014, a 44-bed expansion to Cambridge Memorial Hospital in 2013 and Conestoga College’s ever-expanding Doon campus will also fuel growth in the coming years, he said.
Wiebe emphasized that the $818-million LRT project will “generate lots of growth and jobs.”
Housing starts are expected to reach 3,800 by the end of 2012, further increasing expectations for employment in the construction sector, the Conference board report said.
Ian McLean, president of the Greater Kitchener Waterloo Chamber of Commerce said that while he is frequently asked about woes at RIM, the Conference Board report confirms “we are not a one trick pony by any stretch.”
“We are one of the most diverse local economies in the entire (country) and that includes large cities like Toronto, Vancouver and Montreal. I don’t even think we understand that here in the community.”
He cited continued economic uncertainty in Europe and growing public debt as things that could derail the region’s growth track. “We need our fiscal houses to be in order provincially, federally and municipally,” he said.