January 22, 2008

Halifax economy will grow faster in 2008

By STEPHEN MAHER Ottawa Bureau
The Chronicle Herald

OTTAWA — Halifax’s economy will grow more quickly this year than last in spite of a slowdown south of the border, a survey of the Canadian economy predicts.

The growth will be significant enough to boost the city to eighth place among 27 cities the Conference Board of Canada surveyed, up from 17th place.

The province’s economy as a whole will grow as well, the conference board’s winter outlook predicts, though not as quickly as Halifax’s.

Halifax will enjoy 2.8 per cent growth this year, up from 2.5 per cent last year. Nova Scotia’s economy will go to 2.2 per cent from 2.0 per cent last year.

The growth last year came about as a result of the service sector, the report says. This year, the economy will get a boost from an expanding construction industry, even though housing starts are expected to fall 22.6 per cent.

But two large projects in downtown Halifax ought to keep the construction business moving, the report says.

Ralph Medjuck’s Centennial Group has received regulatory approval for a $65-million hotel, condo and mall at the corner of Salter and Lower Water streets.

And United Gulf’s so-called Twisted Sisters development, a $150-million twin tower project, has received regulatory approval.

"While neither project has a definite start date yet, it is likely at least one of these projects will begin in the next year or so, thus providing some upside risk to the construction outlook over the next two years," the conference board report says.

The city’s manufacturing sector is expected to slow to 0.4 per cent growth, down from 2.0 per cent growth last year.

Services did well in 2007, with 2.9 per cent growth. Finance, insurance and real estate services posted growth of 3.6 per cent. That growth will slow in the next two years, the report says.

Industrially, the economy will benefit from the development of EnCana’s $700-million Deep Panuke offshore project and from IMP’s renewed maintenance contract for search and rescue helicopters, the report says.

The effect of these developments should be lower unemployment, the conference board says. The unemployment rate should decline steadily from 8.1 per cent last year to 6.5 per cent by 2012, the report predicts.