A swift drop in housing starts will lead to slower output growth for the insurance, finance and real estate sectors
Economic growth in Hamilton is predicted to slow down this year according to the Conference Board of Canada’s Metropolitan Outlook: Fall 2015, which calls for drop to 1.5 per cent this year, down from 2.1 per cent in 2014.
“The slowdown in Hamilton's economy is broad-based, as many sectors of the economy are expected to see weaker growth this year,” said Alan Arcand, associate director of the Centre for Municipal Studies in a statement.
While housing prices continue to rise, the region’s housing starts are also expected to decline by 23 per cent this year, according to the report, which is the lowest level the city has seen in six years.
That swift drop in housing starts will lead to slower output growth for the insurance, finance and real estate sectors, the conference board says. Mirroring the overall economic outlook drop, the report says that services sector activity will cool to 1.4 per cent growth this year following 2 per cent growth in 2014.
Conference Board of Canada Economist Jane McIntyre told CBC News that the decline was caused in part by condo projects starting last year that are now finishing up — but also due to the weather last winter, which was one of the coldest on record.
But the long-term trend appears brighter, with economic growth projected to pick up next year, and the conference board says housing starts should increase by 29.5 per cent in 2016.
