An economist with the Conference Board of Canada is quite optimistic about the outlook for the Windsor region.
The conference board has released its outlook for the regional economy for the remainder of 2023 and into next year, highlighting key trends and factors that will help or impede growth in the region.
The report finds weaker economic conditions will carry over into next year, with growth moderating to 1.7 per cent in 2024 but even with this moderation, Windsor is expected to have the strongest growth of all the cities covered in the board’s Major City Insights over 2024–27.
Ted Mallett, the Director of Economic Forecasting at The Conference Board of Canada, says the picture for Windsor is quite optimistic with so many construction projects going on, generating economic benefits for the region.
“That said, there’s still the difficulty with high interest rates are slowing down portion of the economy,” he says. “We think that Windsor will settle a little bit next year compared to the growth we expect for 2023. Things should return to be a little more optimistic, in fact, over the medium term we think Windsor is going to have the fastest growing city economy in the country.”
The positive view on Windsor’s economy stems from the investment and job creation the city has attracted, including the $5-billion NextStar electric vehicle battery manufacturing plant, construction of the Gordie Howe International Bridge, the multi-million dollar reconstruction of County Road 42, and Amazon’s new delivery station on Pillette Road.
The report says housing starts in the city are expected to fall this year but then bounce back in 2024. Overall, the city’s housing market is projected to perform well over the next few years according to the conference board report.
After contracting by 4.7 per cent in 2022, output in Windsor’s construction sector is expected to grow by 1.5 per cent in 2023. The many ongoing construction projects have given the sector a boost throughout the year.
Mallett says there’s a lot going on in the construction side which is always a sign that the economy is performing reasonably well.
“Windsor has some advantages on home building, at least on home ownership. It’s a very affordable market compared to other parts of southern Ontario. One of the reasons why it’s perhaps attracting additional attention from employers is that they know they’ll be able to find employees will to locate or relocate into the area,” he says.
The outlook points to higher interest rates beginning to have an impact, as a result, the metropolitan area’s unemployment rate is forecast to rise from an average of 5.9 per cent this year to 6.7 per cent in 2024.
However, Windsor’s strengthened labour market, proximity to the U.S., and housing affordability relative to other southern Ontario census metropolitan areas make it an attractive city to live in, according to the conference board.
Mallett says when you look at the housing costs relative to income, Windsor is among the best cities for affordability.
“When the economy picks up again, we don’t think that the housing prices will inflate to a level that creates significant problems,” he says. “When interest rates start to come down in the next year, year and a half, then we’ll see some improvements on the affordability side because carrying costs will come down for most residents.”
The conference board outlook also states that wages and salaries per employee rose 5.6 per cent last year, and are expected to rise 3.1 per cent this year and 2.4 per cent in 2024.
Total employment in Windsor rose by around 6,400 jobs last year, surpassing pre-pandemic (2019) levels. Most of the job growth came from the city’s goods-producing industries.
The board predicts employment will rise by 15,000 net new jobs in 2023, an increase of 8.6 per cent, with most of the job growth coming from the services sectors this year.