Sault Ste. Marie’s economy is expected to post real GDP growth of 0.7 percent this year, following a flat reading in 2015.
“For Sault Ste. Marie, a recovery in transportation and warehousing and rising non-residential construction will help the city post modest growth over the next two years.”said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada.
Gains in non-residential investment will drive a recovery in the city’s construction sector. Many projects are underway in the metro area, including the Sault College’s multi-million dollar rebuild of its Northern Avenue campus.
Unfortunately, the outlook is not as bright for residential construction sector, as a slowly declining population will limit demand for new homes. All told, the city’s construction sector should grow by a modest 0.8 percent this year.
On the other hand, with the steel industry still facing pressure from a slower global economy and market overcapacity, the city’s manufacturing sector is set to contract by 0.3 percent this year.
Despite persistent declines on the goods side of the economy, Sault Ste. Marie’s services sector has kept on expanding, albeit weakly. This year, services sector output growth is forecast to improve to 0.8 percent in 2016.
In particular, the modest expansion in construction activity should provide a lift to Sault Ste. Marie’s transportation and warehousing sector, which is slated to post growth for the first time in five years.
Employment, which fell by a record 18 percent last year, is expected to rebound with a 9 percent gain in 2016.