Toronto's multi-channel economic engine once again tops the nation in CIBC rankings

Toronto's multi-channel economic engine once again tops the nation in CIBC 
Calgary, Regina and Winnipeg show strong and more sustainable economic momentum 
TORONTO, Jan. 3, 2013 /CNW/ - For the second year running, Toronto has taken 
the top spot among the country's major cities in CIBC World Markets' latest 
Canadian Metropolitan Economic Activity Index rankings. 
"What's so impressive about Toronto's performance is that the city has topped 
our ranking for more than a year," says CIBC Deputy Chief Economist Benjamin 
Tal in his latest Metro Monitor report. "Given that our index measures 
momentum as opposed to a level of activity, Toronto's ability to maintain 
momentum for such a long period is impressive. Also note that Toronto ranked 
in the top five for more than seven consecutive years, with the only exception 
being the 2009 recession when the city's ranking slipped to 7th place." 
While Toronto did not lead the pack in any of the bank's sub-measures of 
economic momentum, it ranked high enough in many categories to place it in top 
position overall. "Simply put, the multi-channel nature of Toronto's economic 
engine is the secret not only behind its current top position, but also behind 
its ability to maintain a relatively high grading over the past two years. 
This can be easily seen in the robust activity of the city's economy during 
the economic recovery, with the city outpacing the national average by a wide 
Over the past year, Toronto has benefited from a recovery in the manufacturing 
sector, helped by the positive spin-off of the improvement in U.S. auto 
demand. The construction sector, spurred on by activity in both the 
residential and non-residential segments of the industry, also played an 
important role in the city's consistent outperformance. 
As of the third quarter, housing starts in the city rose 30 per cent 
year-over-year with 99 per cent of this growth coming from the condominium 
market. Population in the city is rising at a strong pace of just over two per 
cent on a year-over-year basis, while employment growth is hovering around its 
strongest showing in more than a decade. 
"The coming year, however, will pose a major challenge to the city's ability 
to maintain its current economic momentum," notes Mr. Tal. "A softening 
housing market, the end of many federal and provincial governments' 
infrastructure stimulus projects, a projected slower growth trajectory in the 
manufacturing sector and softer retail trade activity will work to slow 
overall economic momentum in the city in 2013." 
Calgary ranked second in the analysis, up from ninth last year. This reflects 
strong population growth and a healthy labour market. Calgary enjoys one of 
the lowest unemployment rates in the nation (5.1 per cent as of the third 
quarter of 2012) while the quality of employment is relatively elevated 
(ranked 2nd among all cities). "As a result, consumer spending in the city has 
been relatively strong, with retail sales rising by an estimated nine per cent 
over the past year," says Mr. Tal. "As opposed to Toronto, the residential 
housing market is playing only a marginal role in supporting activity in the 
The city of Regina also showed strong growth moving up to third from eighth a 
year ago. Momentum is helped by very strong population growth (ranked 4th in 
the nation) and a healthy labour market, with the city experiencing the second 
lowest unemployment rate among the country's 25 census metropolitan areas 
(CMA). "The city's robust population growth has spurred housing market 
activity, with housing starts rising by a strong 80 per cent year-over-year in 
the third quarter. Regina is also supported by an improving manufacturing 
sector, with activity in 2012 estimated to outpace the national average for 
the second year in a row." 
Winnipeg's fourth place ranking reflects strength in both the construction and 
the manufacturing sectors. Housing starts in the city rose by 50 per cent in 
the year ending September 2012 while non-residential activity rose at a rate 
second only to Saskatoon. At the same time, some improvement in demand for 
transportation equipment has boosted activity in the manufacturing sector. 
Consumer fundamentals in the city are also in good shape with a relatively 
healthy labour market and the nation's second lowest personal bankruptcy rate. 
CIBC Metropolitan Economic Activity Index (2012 Q3)  
|Rank  |CMA                   |3Q Moving Average|
|   1. |Toronto               |         20.6    |
|   2. |Calgary               |         19.5    |
|   3. |Regina                |         18.4    |
|   4. |Winnipeg              |         18.4    |
|   5. |Saskatoon             |         18.2    |
|   6. |Edmonton              |         17.8    |
|   7. |Ottawa                |         16.8    |
|   8. |Vancouver             |         14.0    |
|   9. |Halifax               |         13.8    |
|  10. |Saguenay              |         12.2    |
|  11. |Montréal              |         11.2    |
|  12. |Québec City           |         10.5    |
|  13. |London                |         10.4    |
|  14. |Hamilton              |          9.6    |
|  15. |Kitchener             |          9.4    |
|  16. |Kingston              |          9.1    |
|  17. |Trois-Rivières        |          8.6    |
|  18. |Thunder Bay           |          7.3    |
|  19. |Victoria              |          6.8    |
|  20. |St. John's            |          6.6    |
|  21. |St. Catharines-Niagara|          6.0    |
|  22. |Windsor               |          4.0    |
|  23. |Saint John            |         -0.8    |
|  24. |Sherbrooke            |         -0.8    |
|  25. |Sudbury               |         -2.4    |
About the CIBC Metropolitan Economic Activity Index 
Using 9 key macroeconomic variables, CIBC's metropolitan index of economic 
activity is structured in a way that approximates the change in each city's 
level of economic activity. With data going back in history, the index 
monitors not only the current performance of a given city but also tracks its 
cyclical behaviour against the national economy and other census metropolitan 
areas (CMA). The focus is on the 25 largest CMAs in Canada. 
The macro variables used to develop the index are: 

    --  Population growth;
    --  Employment growth;
    --  Unemployment rate;
    --  Full-time share in total employment;
    --  Personal bankruptcy rate;
    --  Business bankruptcy rate;
    --  Housing starts;
    --  MLS Housing resales; and
    --  Non-Residential building permits.

The complete CIBC World Markets report is available at:

CIBC's wholesale banking business provides a range of integrated credit and 
capital markets products, investment banking, and merchant banking to clients 
in key financial markets in North America and around the world. We provide 
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industries as well as top-ranked research for our corporate, government and 
institutional clients.

Benjamin Tal, Deputy Chief Economist, CIBC World Markets Inc. at (416)  
956-3698, or Kevin Dove, Head of External Communications 
at 416-980-8835,


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CO: CIBC World Markets
ST: Ontario

-0- Jan/03/2013 13:30 GMT

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