BMO Bank of Montreal
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BMO Bank of Montreal

April 26, 2012 08:50 ET

The Hammer is Coming Back: BMO Releases Report on Outlook for Economy and Labour Market in Hamilton

- Report Shows Job Growth Far Outpacing the National Average

- BMO Offering Support to Businesses by Making $10 Billion Available Over Next Three Years

- McMaster University's DeGroote Business School Provides Insights on Hamilton

TORONTO, ONTARIO--(Marketwire - April 26, 2012) - According to a new report from Doug Porter, Deputy Chief Economist, BMO Capital Markets, and Robert Kavcic, Economist, BMO Capital Markets, Hamilton's job growth is nearly tripling the national average and as businesses expand, the city's jobless rate is on track to drop to 5.5 per cent by 2016, putting it at prerecession lows.

The report on the Hamilton area is the first in a series of economic and business overviews for various cities across Canada that will be published by BMO throughout the year.

"Amid some ongoing challenges in Ontario - including a strong Canadian dollar and sluggish U.S. demand - Hamilton's economy has shown encouraging signs, especially in the job market," said Mr. Porter.

"Employment growth in Hamilton has accelerated since mid-2011, up a solid 4.2 per cent year over year in the first quarter and outpacing the national average by nearly triple," noted Mr. Porter. "The city's jobless rate has fallen to 6 per cent from near 7 per cent last fall, and a high of 9 per cent at the height of the recession."

The report, released today, revealed:

Real Estate/Construction

  • Housing demand is still elevated in the Hamilton-Burlington region, with existing home sales near the highest twelve-month total on record.
  • Firm demand and relatively tight supply pushed average prices to a record $353,000 in March. Affordability remains relatively attractive, with prices averaging slightly more than four times the estimated median family income.
  • Residential construction activity has picked up, with single-detached and condo construction running at similar levels.
  • Nonresidential construction will get a boost from the 2015 Pan-Am Games, which are expected to attract up to $235 million in infrastructure investment from Federal and Provincial governments.

Business Sector

  • Manufacturing suffered steep declines during the recession, with some companies recently moving operations south of the border.
  • On the positive side, Maple Leaf Foods is investing nearly $400 million in a meat processing plant, which should be in operation by 2014. Ontario's food processing sector has been a stalwart in recent years.
  • Construction is also underway on the McMaster Automotive Research Centre which will focus on green automotive technology.

"Hamilton is positioning itself to take advantage of a natural logistical advantage," said Marvin Ryder, Professor of Business at McMaster University's DeGroote School of Business. "With a large commercial port, a hub of highways, available warehouses and an international airport, Hamilton expects to leverage these into further business growth and job creation. The City is also committed to developing a supportive light-rail transit system over the next two decades. By increasing the liveability of the City and improving its links to the GTA, Hamilton will continue to be a destination for first-time home buyers and families in this region."

Mr. Ryder noted that Hamilton has been rust-proofing its economy for nearly a decade through the birth and development of medium-sized businesses. "Such companies, which typically employ ten to fifty people, build on the new engines of Hamilton's economy - health care and education. McMaster's Innovation Park is a prime example of an incubator that will be growing new businesses in Hamilton for the next twenty years."

"While the recession may have led some Hamilton businesses to put their growth plans on hold, their efforts at that time to reduce operating expenses, source new supply chains, and open new markets positioned them well to begin to invest again in new equipment, processes and people," said Rick Jaques, Vice President, South Central Ontario, BMO Bank of Montreal. "Most local businesses we talk to have a renewed sense of optimism, and a desire to pursue growth plans that are at the very heart of the transformation that is taking place across the region. I strongly believe that BMO's commitment to make $10 billion in credit available for businesses can make a big difference to companies investing in Hamilton."

A full copy of the report is available 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 $538 billion as at January 31, 2012, and more than 47,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.

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