London to add 6,000 jobs

The next three years will bring thousands of new jobs to London, Ont., finds a BMO Economics report.

“With modest growth expected over the medium term…London’s economy should add about 6,000 new jobs in the next three years,” says Robert Kavcic, senior economist at BMO Capital Markets.

While London is still facing some challenges, like the shutdown of a Ford Motors plant in 2011, it has a lot to be optimistic about.

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The city is close to Highway 401 and Toronto’s Pearson International Airport, giving it access to both the U.S. and markets farther afield, says David Blyth, vice president, south western Ontario district, BMO Bank of Montreal..

“London is also home to some of Canada’s preeminent educational, medical, life sciences and biotechnology research institutions in the country, which attracts and creates a workforce with the skills to meet a wide range of industry needs,” he adds.

The manufacturing sector was strongly affected by the downturn but from a cyclical perspective, Ontario’s auto sector has recovered smartly, with production returning to near pre-recession levels amid strong sales on both sides of the border.

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A more robust U.S. economy—expected to grow at a rate of 3% or more next year—should help manufacturing in the area, notes the report.

Unlike some Canadian cities, London’s housing market has been relatively stable since the recession, with moderate price growth. Existing home sales were slightly below the 10-year trend in August, and average prices have churned out steady growth of around 3% per year over the past five years, helped by lower mortgage rates.

Affordability in the city is also favourable, with the average home price sitting at little more than 3x median family income, among the lowest of Canada’s larger cities. Homebuilding had a strong year in 2012, with more than 2,200 units started in the city, the highest level since 2008.

Total employment in the city has rebounded roughly 4% from the recession low, although it remains about 5% below peak-2007 levels.

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