Region’s economy back on track for growth
Potential ‘coiled spring’ effect could jolt housing market
After outpacing the provincial economy for 13 years, Waterloo Region’s economy only managed to match provincial output in 2023, succumbing to the pressures of high interest rates and inflation worries.
The minor blimp will be shortlived, with the Conference Board of Canada’s latest four-year forecast predicting the region will return to outperforming the province by 2025 after a sluggish 2024.
“We really think that Kitchener, Waterloo and Cambridge are on the upper end of the opportunity scale for metro areas in Ontario,” said Ted Mallett, economic forecasting director at the Conference Board. “So, it will do better than the Ontario average for the next number of years.”
After enjoying a robust post-pandemic recovery, expansion in the region cooled to 1.3 per cent in 2023. Forecasts for 2024 show a similarly sluggish economy, stalling at 1.3 per cent as one of the fastest interest rate hikes in Canadian history continues to bite into local production.
As interest rates start to normalize in the years ahead, the Conference Board expects the region’s economy to bounce back in 2025 with a forecast of 2.8 per cent growth. It then expects growth to hover around three per cent annually to the end of its forecast in 2028.
“Much of the boost at the early part of the pandemic really happened around the outer ridges of the Greater Toronto Area,” said Mallett. “So, when it had to correct, it has had a bigger impact in those regions.”
House prices, for example, briefly flirted with close to a million dollars in parts of the region in 2022, before averaging about $740,000 in 2023.
“But we think the outlook for the (region) is reasonably good,” said Mallett. “The significant retooling of a lot of the manufacturing
crammed into bedrooms and apartments. Grand River Transit recorded its highest ridership in September 2023 as Conestoga students accounted for one in four passengers.
Federal Immigration Minister Marc Miller slammed Conestoga in March after the college swelled its financial surplus to $106 million while leading the nation in recruiting foreign students who pay much higher tuition.
Two other Canadian cities also saw population growth exceeding six per cent last year: Moncton, N.B., and Calgary, Alta.
In southwest Ontario, Brantford and London grew by almost four per cent. Guelph grew by just over two per cent. Hamilton grew by less than two per cent.
The urban population of Waterloo Region (called a census metropolitan area) excludes 10,000 residents of Wellesley Township who are less integrated into the urban economy.
Including Wellesley, the regional population reached 675,227 by July 1, 2023.