Even though economic growth in Calgary and Edmonton is expected to moderate in 2007, the two Alberta cities will remain the top performers among among Canadian Census Metropolitan Areas (CMAs), according to a report from the Confernce Board of Canada.

“Economic growth in Calgary and Edmonton will slow to about half of their remarkable gains of 2006. Still, no other Canadian CMA comes close to the performance of these Alberta cities,” said Mario Lefebvre, director, Metropolitan Outlook Service, in a news release.

Both Calgary and Edmonton are benefiting from robust energy investment, strong construction activity and healthy service-producing industries. After expanding by an estimated 7.3% in 2006, Calgary’s economy will grow by almost 4% next year. Edmonton, ranked second last year with economic growth of 6.6%, will remain second with a further gain of 3.6% in 2007.

Vancouver, Victoria and Abbotsford will post estimated real gross domestic product growth of 3.9% each in 2006, allowing them to share third place in the growth rankings. While growth is expected to moderate in all three British Columbia CMAs in 2007, Vancouver will hold on to the third position of the rankings and Abbotsford will slip to a still-respectable fifth.

Specifically, Vancouver’s real GDP growth is forecast to come in at 3.1% in 2007, supported by another strong year for the construction sector and solid employment gains, which will in turn boost consumer spending. The Abbotsford economy is anticipated to continue to enjoy strong domestic demand, allowing growth to reach three% next year. The story is somewhat less rosy in Victoria, where after three strong years, real GDP growth is expected to weaken to 2.1%, due to a slowdown in the CMA’s key services sector.

Two other Western CMAs appear in the top half of the growth rankings for 2007, namely Winnipeg and Saskatoon. Both CMAs are expected to post growth of 2.9% in 2007. The other western CMA covered in this edition of the Metropolitan Outlook, Regina, is expected to see economic growth accelerate slightly, from 2.1% in 2006 to 2.4% in 2007.

While none of the CMAs located east of Manitoba is expected to make it to the top three of the metropolitan growth rankings again in 2007, significantly stronger overall results are forecast. In fact, average real GDP growth in the Eastern CMAs is anticipated to reach 2.4% in 2007, up from an estimated 1.7% in 2006.

Leading the way will be St. Catharines-Niagara, where two major electricity generation projects are expected to boost construction output and create new jobs. This will allow economic growth in the CMA to accelerate from 0.4% in 2006 to 3.1% in 2007.

Toronto’s economy will also accelerate next year, from growth of 2.3% in 2006 to 2.9% in 2007. Much of this rebound can be attributed to the expected recovery in the manufacturing sector, which dragged down overall growth in 2006. Beginning in 2008, Toronto’s average annual growth of 4.1% is forecast to lead all 20 Canadian CMAs covered in this edition of the Metropolitan Outlook.

Halifax, which fared relatively well in 2006, is forecast to remain in the top half of CMAs next year. A second consecutive strong performance by the services sector will allow Halifax’s real GDP growth to reach 2.8% in 2007.

Quebec City had the strongest metropolitan economy outside western Canada in 2006. Growth is expected to come in at 3.2%, due largely to a double-digit gain in manufacturing output. However, declining housing starts will take their toll on the overall performance of the economy in 2007 and limit real GDP growth to 2.5%.

Ottawa-Gatineau’s 2007 forecast has been downgraded, largely because the demise of the city’s light-rail project has weakened the construction sector outlook. Still, economic growth is expected to remain stable at 2.5% next year.

Montreal’s manufacturing sector suffered through another difficult year in 2006, dragging real GDP growth down to 1.5%, its lowest level since 2001. A modest recovery in manufacturing, combined with a stronger performance in the services sector, will boost real GDP growth in 2007 to 2.5%.

Thanks to solid non-residential construction, steady growth in the services sector, and a rebound in manufacturing output, London’s real GDP growth is expected to improve to 2.4% in 2007, a gain from 1.5% in 2006.

A gradual recovery in manufacturing activity will boost Hamilton’s real GDP growth from 1.1% in 2006 to 2.3% in 2007.

@page_break@Sherbrooke’s manufacturing sector is expected to improve modestly as well, enabling economic growth in the CMA to accelerate to 2.2% next year.

Thunder Bay’s forestry sector will gain short-term benefits from provincial government support to reduce electricity costs. The manufacturing and construction sectors will also contribute to an expected two% increase in real GDP in 2007.

Strong demand for nickel is anticipated to support mining output in the Sudbury CMA. Unfortunately, the expected reduction in residential construction activity will limit growth to 1.5% in 2007. Sudbury’s ranking as the weakest performer among the CMAs covered in this edition of the Metropolitan Outlook will be shared with Trois-Rivières. A high Canadian dollar, a decline in construction activity and modest income gains are expected to limit growth there.