Recession officially over but Canadian cities still hurting: CIBC World Markets Inc.
Dec 1, 2009
10 of top 25 metropolitan areas in negative territory
The Metro Monitor finds that economic momentum in Canada's top metropolitan centres is at its lowest level since 1991, with 10 of the country's top 25 urban areas showing negative growth. "While the Statistics Canada's report provides us with a sense of the sectoral breakdown of the disappointing performance, it is silent on the regional distribution of the pain," says Benjamin Tal, senior economist and author of CIBC's Metro Monitor.
"On a year-over-year basis, our index continued to trend downward, giving us some early warnings regarding the soft GDP numbers. After all, more than two-thirds of Canadian GDP is generated in Canada's major cities. So the tale of those cities is the tale of the economy."
Ten cities are now in negative territory, double the number in the first quarter of the year. Nine of the ten cities are located in Ontario and
For the first time, the city of
The report notes that both Regina and Saskatoon, which ranked second and third respectively, were able to maintain their high rankings based on rapidly growing populations and a continued expansion of their job markets. Both cities also enjoy very low unemployment rates as well as extremely low rates of both business and consumer bankruptcies.
The still soft mining and drilling activity reported in Statistics Canada's third quarter GDP report is clearly reflected in the loss of momentum in Alberta. "
He finds that while population growth in
The CIBCWM Metropolitan Economic Activity Index
CIBC's Metro Monitor uses nine key macroeconomic variables to develop a metropolitan index of economic activity, which 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 not only monitors the current performance of a given city but also tracks its cyclical behaviour against the national economy and other census metropolitan areas (CMAs). The focus is on the 25 largest CMAs in
The macro variables used to develop the index are: (1) Population growth, (2) Employment growth, (3) Unemployment rate, (4) Full-time share in total employment, (5) Personal bankruptcy rate, (6) Business bankruptcy rate, (7) Housing starts, (8) MLS Housing resales, and (9) Non-Residential building permits. The information is combined into one index per city to produce "The CIBCWM Metropolitan Economic Activity Index".
The complete CIBC World Markets report is available at: http://research.cibcwm.com/economic_public/download/metro_monitor.pdf.
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
CIBC World Markets Inc. is a wholly-owned subsidiary of Canadian Imperial Bank of Commerce (CM: TSX; NYSE) and part of Canadian Imperial Bank of Commerce's wholesale banking arm which also includes other affiliates including: CIBC World Markets Corp., CIBC World Markets plc, CIBC World Markets Securities
For further information: Benjamin Tal, Senior Economist, CIBC World Markets Inc. at (416) 956-3698, email@example.com; or Kevin Dove, Communications and Public Affairs at (416) 980-8835, firstname.lastname@example.org