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Windsor forecast to lead nation in economic growth rate

By March 23, 2023March 30th, 2023No Comments

Windsor forecast to lead nation in economic growth rate

Mega-projects like the construction of the Gordie Howe International Bridge, shown Feb. 24, 2023, has forecasters predicting the Windsor area will see one of Canada's fastest paces of economic growth over the next year. PHOTO BY DAX MELMER /Windsor Star

The Windsor area’s economy is forecast to expand at nearly twice the national rate in 2023 — more than any of the 24 major Canadian cities included in a study by the Conference Board of Canada.

The study predicts the local gross domestic product will grow by 2.4 per cent in 2023, compared to 1.3 per cent nationally. Windsor is expected to continue to outpace the nation in 2024 by growing another 2.1 per cent compared to the 1.5 per cent forecast nationally.“The outlook for Windsor is particularly bright,” said Conference Board of Canada senior economist Richard Forbes.

“There are still economic headwinds out there, so I wouldn’t say Windsor is insulated.

“It’s shielded from some of the adverse effects that are going on in some other parts of the economy. It’ll be a slow downturn here, if there is one at all.”

The study was compiled in January and uses data collected by Statistics Canada and the Canada Housing and Mortgage Corporation.

Forbes said local growth will be driven by the construction of major projects like the Gordie Howe International Bridge and the NextStar Energy e-battery plant, the retooling of Stellantis’s Windsor Assembly Plant for EV production and an increase in demand for new vehicles.An accelerating rate of population growth is also stimulating economic activity across all sectors, Forbes said. The study forecasts population growth of 1.1 per cent in each of the next two years and 1.5 per cent between 2025 and 2027.He said it’s quite possible the study is conservative in prognosticating just how good the economy will become in the Windsor census metropolitan area over the coming years. He said the Conference Board of Canada errs on the side of caution when producing such studies.
“There’s a lot of upside risk for Windsor, which is a good thing,” Forbes said.“We base our study on what we know has been announced. If there’s more investments to come, we’ll add that to our outlook (in this summer’s update).”For example, the forecast on the local unemployment rate trending down to 7.3 per cent by the end of the year might have looked good when the rate was 8.6 per cent in November.Since then, the Windsor region has seen the number of employed people increase by 26,000 to a record-high 190,000 in February, and the unemployment rate fell by three points to 5.6 per cent last month.

Strong economic growth is forecast for the Windsor area due in part to large-scale construction projects like the NextStar Energy Inc. battery plant shown under construction in Windsor on March 16, 2023. PHOTO BY DAN JANISSE /Windsor Star

Forbes said what’s most positive for the Windsor CMA, which includes Amherstburg, LaSalle, Tecumseh and Lakeshore, is the area’s economic activity is generating more jobs and opportunities. It’s not inflating the local GDP numbers with just expensive manufactured products such as automobiles.
The GDP in the construction sector is forecast to grow by 12.2 per cent this year and another 6.8 per cent in 2024. The study then predicts the construction of the new hospital will help fill the gap as other projects are wound down.One of those mega projects to be completed by then is the Gordie Howe International Bridge, which Forbes said will also enhance the area’s attractiveness to investors.“All of these activities are having spillover effects into other parts of the local economy,” Forbes said. “It (Gordie Howe bridge) means investment on either side of the border is important.”The fact post-pandemic traffic is again flowing freely across the Canada-U.S. border is another economic accelerant for our highly integrated economy.

Forbes said the other sectors benefiting most going forward will be logistics, retail trade and warehousing, financial and professional services.However, rapid growth also brings challenges.Two of the biggest ones will be finding enough skilled workers for the thousands of jobs coming over the next three years, and available housing needed for those workers and their families.“Windsor, unlike a lot of other cities, has an unemployment rate that has been pretty high,” Forbes said.

“It means a lot of people are looking for work. We think Windsor is well-equipped to find the required workers it needs.

“However, with population growth, if the housing market is constrained, then there will be upward pressure on housing affordability.”

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