LONDON, ONTARIO--(Marketwired - Sep 16, 2013) - The next three years will bring 6,000 new jobs to London, according to a new report released today by BMO Economics.
The report on one of the key economic hubs of Southwestern Ontario is the latest in a series of economic, housing and business overviews for various cities and regions across Canada that will be published by BMO over the next year.
"London is a great city with incredible assets," said David Blyth, Vice President, South Western Ontario District, BMO Bank of Montreal. "We're strategically located in the heart of Southwestern Ontario on Canada's NAFTA Superhighway which, along with an International Airport and Class 1 rail infrastructure, gives our businesses critical and efficient access to markets across Canada, the U.S. and overseas. London is also home to some of Canada's preeminent educational, medical, life sciences and biotechnology research institutions in the country, which attracts and creates a workforce with the skills to meet a wide range of industry needs. We're extremely bullish on the outlook for this city and believe that London is well positioned to benefit from the economic recovery."
"While the manufacturing sector continues to present challenges for London's economy, diversity remains one of its major strengths," said Robert Kavcic, Senior Economist, BMO Capital Markets. "As an example, there has been recent talk of repurposing the Ford plant in St. Thomas - closed in 2011 - as a major food processing facility, a sector that continues to perform well across Ontario."
Mr. Kavcic stated that a more robust U.S. economy - expected to grow at a 3 per cent, plus clip next year - should provide some much-needed support to manufacturing as the sector continues its recovery from the Great Recession. "With modest growth expected over the medium term, BMO Economics expects that London's economy should add about 6,000 new jobs in the next three years."
"London has shown a remarkable ability to adapt to a varying economic climate, with local businesses providing diverse strengths," Mr. Blyth added. "Let's create these 6,000 jobs together. I am committed to London businesses getting their share of the $10 billion in credit BMO has made available, giving them access to the capital they need to grow and build on the momentum that is taking hold in this city."
"London is a priority for BMO, and we are increasing our investment to support our personal and commercial customers," noted Mr. Blyth.
The report, released today, revealed:
- Unlike some Canadian cities, London's housing market has been relatively stable since the recession, with moderate price growth.
- Existing home sales were slightly below the 10-year trend in August, and average prices have churned out steady growth of around 3 per cent per year over the past five years, helped by lower mortgage rates.
- Affordability in the city is also favourable, with the average home price sitting at little more than 3x median family income, among the lowest of Canada's larger cities.
- Homebuilding had a strong year in 2012, with more than 2,200 units started in the city, the highest level since 2008.
- The manufacturing sector was strongly affected by the downturn.
- However, from a cyclical perspective, Ontario's auto sector has recovered smartly, with production returning to near pre-recession levels amid strong sales on both sides of the border.
- That, plus firmer demand growth in the U.S., could spur modest growth in manufacturing output by 2014-a much needed shot of good news for the local economy.
- Total employment has rebounded roughly 4 per cent from the recession low, although it remains about 5 per cent below peak-2007 levels.
- With modest growth over the medium term, London's labour market should be able to add about 6,000 jobs through 2016, reducing the current jobless rate by one percentage point to around 7.3 per cent, near the upper end of the pre-recession range.
The full report can be downloaded at bmocm.com/economics.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $549 billion as at July 31, 2013, and more than 46,000 employees, BMO Financial Group provides a broad range of personal and commercial banking, wealth management and investment banking products and solutions.
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