Montreal is used to being near the top of the rankings for best party town, livability and worst traffic. But best place for job creation? Not a chance.

That’s why Montrealers took several months to notice the unemployment rate was dropping steadily. The trend only began making headlines in January, although all of 2016 was a stellar year. By the end of 2016, 29,000 more people were working full-time, a jump of almost 4% year-over-year. Manufacturing and retail and wholesale trade were the biggest gainers.

And this rise wasn’t a statistical blip. As 2017 winds down, the unemployment rate still is at 40-year lows. In August, it was 6.5%. After years of underperformance (unemployment soared to 15% in the early 1990s), the tide has turned.

“It’s undeniable,” says Michel Leblanc, the 54-year-old president and CEO of the Board of Trade of Metropolitan Montreal. “When you look at all the indicators, we’re doing very well these days. It’s real momentum. The unemployment rate for many months was below Toronto, Calgary and Edmonton, and people my age have never seen that.”

Several factors are at play, including a jump in exports, thanks to the low Canadian dollar and the strong U.S. economy. And don’t forget low interest rates. As well, industries on which governments have focused have done well, including computer games and aerospace, which also helps.

Public construction projects are creating jobs: billions are being spent on roadways, including a new bridge and several interchanges, and work is about to begin on a 67-kilometre electric train network.

The private sector is showing confidence in the city. Last year, a record $1.4 billion in foreign direct investment flowed into the region, more than half of it going to information and communication technology. The current year is also going well so far. Siemens Canada Ltd. and ABB Ltd. are among this year’s investors, with a combined $225 million being spent on local expansion.

The new economy is welcome. Google Inc. just opened its seventh global cloud-computing centre in this city, and Microsoft Corp. and Facebook Inc. are both setting up artificial intelligence labs. Game-maker Ubisoft Entertainment SA, which after 20 years in Montreal employs almost 3,000 in the city, states it will add another 1,000 in Quebec over the next decade.

But there is a dark cloud on the horizon in the form of a Boeing Co. airplane.

Airplane-maker Bombardier Inc., the key employer in Montreal’s 40,000-job aerospace sector, may face a big tariff on C-Series jets sold in the U.S. – a demand by Boeing that the protectionist U.S. administration was only too happy to impose. If the tariff is applied, it could cause major job losses in Montreal. How U.S. negotiators behave in upcoming trade negotiations is also a lingering question.

Both Quebec Premier Philippe Couillard and Montreal Mayor Denis Coderre can share the credit for Montreal’s growth. Quebec has erased its deficit and is spending, giving confidence to the corporate world. And Coderre has improved Montreal’s reputation by tackling corruption and attracting more international tourists by going all out with the city’s 375th birthday party.

However, the economic renaissance is not impressing voters. Couillard and Coderre, both first-term incumbents, are up for re-election (Coderre in November; Couillard in October 2018) and should be shoo-ins. But polls show neither will have an easy time: Couillard is being hurt by identity issues and the aftereffects of the austerity measures that helped him slay the deficit; and Montrealers may be tiring of Coderre’s grandiose projects.

© 2017 Investment Executive. All rights reserved.