Abbotsford, B.C. is expected to lead Canada’s small and mid-sized census metropolitan areas (CMAs) in economic growth this year, but given the overall slowdown in Canada’s economy, most CMAs can expect slower growth this year, according to a report from the Conference Board of Canada

“The ongoing downturn in the manufacturing sector is dragging down economic growth in Canada’s small and mid-sized CMAs,” says Alan Arcand, [rincipal economist. “All CMAs except for Thunder Bay, which ranked lowest last year, are expected to post slower growth this year. And even Thunder Bay’s economy is forecast to eke out only a marginal gain.”

Coming off a modest 2.7% increase last year, Abbotsford’s real gross domestic product (GDP) is expected to grow by only 2.5% in 2008. The CMA’s economy will be held back by weak output in wood product manufacturing, although non-residential construction activity is expected to remain strong.

Aside from Abbotsford, only Trois-Rivières, Que. and Saint John, N.B., are expected to see economic growth above the 2% mark this year. The declining manufacturing sector, particularly the paper industry, continues to be of concern for Trois-Rivières, but provincial government infrastructure projects will bolster its economy. Growth in Saint John will ease to 2.3% on weaker construction and wholesale and retail trade.

The drop in manufacturing output, due to the high Canadian dollar and the sluggish U.S. economy, will limit growth in Oshawa, Ont. and Sherbrooke, Que. too. Oshawa posted real GDP growth of 2.1% in 2007. But production cuts and layoffs at General Motors truck assembly plant partly explain why real GDP growth is forecast to slow to 1.9% in 2008.

Auto parts and plastic products manufacturing weakness in Sherbrooke will be offset by vigorous construction activity and solid growth in the services industry. Sherbrooke’s GDP growth is expected to come in at 1.8% in 2008.

The Metropolitan Outlook, published quarterly, provides economic forecasts for 27 Canadian CMAs, their provinces, and Canada.

This is the first time the Conference Board has ranked 14 small and medium-sized CMAs together in the same outlook. In previous outlooks, these CMAs were included with larger Canadian cities.