A report released Thursday by Bank of Montreal economists says economic growth in Canada’s “technology triangle” (CTT) will surpass that of Ontario during the next couple of years.
That’s no mean feat, said the Bank of Montreal’s deputy chief economist Rick Egelton in a press release announcing the study’s results, considering that the province has had and will continue to have one of the fastest growing economies in Canada.
According to the bank’s study the triangle area – of Kitchener, Waterloo, Cambridge, Guelph and surrounding areas – has benefited from substantial entrepreneurial dynamism and excellent synergies amongst the private sector, academia and governments.
The study entitled “Canada’s Technology Triangle, The Future Looks Bright” used the area’s demographics, employment growth, housing markets, commercial/industrial construction, manufacturing and the services sector to show that the region’s economy outperformed on all fronts during the past three years, generating powerful economic growth.
Egelton projected that economic growth in the region will run at an average annual pace of 4.5 per cent during the next two years, a full percentage point faster than the Ontario average. While this would be down from approximately six per cent during the past three years, it would nevertheless be a very strong result, making the region one of the growth leaders in Canada.
The moderation in the region’s growth largely reflects the general slowdown anticipated by the bank’s economists for the North American economy in 2001 and 2002.
“In fact, a downshift in growth in CTT region might be timely, given the fact that the region’s labour force and industrial/commercial capacity are currently stretched,” Egelton explained. “It will provide an opportunity for the region to develop its infrastructure to support sustained strong growth over the longer term.”
However, the triangle area’s pace is not likely to stop as the drivers of growth remain firmly in place, establishing a solid base for sustained expansion in the region during the next two years and even further, said Egelton
The study cited robust growth in manufacturing as an important driver of the region’s economy. The region hosts a wide spectrum of manufacturing concerns, including auto parts, motor vehicle assembly, machinery, electrical and electronic equipment, tool and die, plastics, and many others. Advanced manufacturing, for example, production of high value-added equipment to support the information-communications sector and biotechnology, is particularly well represented in the region.
Population growth in the area is well above the national average due to the region’s ability to attract people from other countries, provinces and parts of Ontario. Egelton cited excellent education facilities, employment opportunities, residential facilities, and easy access to other major metropolitan centres in Canada and in the United States.
The region’s demographics also reveal a youthful skew as well as relatively high average family income, according to the study.
From an industrial perspective, the region’s manufacturing, construction, professional/scientific services, and educational services sectors are projected to sustain strong expansion. Additionally, relatively fast growth in population, the region’s youthful orientation, and healthy gains in employment and disposable income have generated vibrant conditions for retailers and homebuilders.