BUSINESS

Toronto's Economy Tops Canadian City List, Driven By Jobs, Housing

07/19/2011 07:17 EDT | Updated 09/18/2011 05:12 EDT
Flickr: Da Veed

THE CANADIAN PRESS -- TORONTO - A vibrant labour and housing market has pushed Toronto to the top of CIBC's list of best-performing Canadian metropolitan economies, according to a report released Monday.

The bank's latest Canadian Metropolitan Economic Activity Index found the economy in Canada's largest city is firing on multiple cylinders, driving it to the top spot among the country's biggest 25 cities.

Its first place ranking is largely due to its vibrant labour and housing markets and a momentum gain across a diversity of sectors, CIBC deputy chief economist Benjamin Tal wrote in the report.

"Simply put, the multi-channel nature of Toronto's economic engine is the secret not only behind its current top ranking, but also behind its ability to maintain a relatively high ranking position over the past two years," he said.

Toronto's robust activity during the economic activity has outpaced the national average by a wide margin, he said.

"Key here is Toronto's vibrant labour market," he said. "More than 80 per cent of the increase in employment over the past quarter was in full-time positions."

Meanwhile, the local real estate market remains one of the hottest in the country, with housing starts nearly doubled from the same period last year. Population growth in the city is also among the highest in Canada.

The rate of consumer bankruptcy in the city is on a downward trend and is among the lowest in the country.

Toronto was not the biggest gainer in any of the index's categories, but broad-based strength helped push it up one notch from the previous quarter to the top spot.

Kitchener, Ont. ranked second, followed by Winnipeg, Regina and Montreal.

Overall, the metropolitan index lost some ground compared to the first quarter of last year, but still indicates that city economies are growing at a healthy pace, CIBC (TSX:CM) said.

However, it added that more recent indicators suggest that economic activity has softened in the second quarter.

The report said Kitchener also continues to show positive momentum on the back of a very strong labour market, healthy population growth and a low level of business bankruptcies.

Third-ranking Winnipeg saw a steady improvement coming out of the latest recession.

"The positive momentum in Winnipeg is a relatively new development," Tal said.

"During the recession, the city followed the trajectory of the national economy very closely. However, recent quarters have seen the city outperforming the national average, with the performance gap currently at a record-high."

Regina, meanwhile, continues to experience a growing population and job market, with the second lowest unemployment rate in the country. It also has the lowest personal bankruptcy rate among all urban centres.

Montreal topped CIBC's previous ranking but slipped to fifth as its growth moderates compared to the other top cities.

St. John, N.B., Thunder Bay, Ont., and Saguenay, Que. posted negative growth.