Major City Insights

Winnipeg

July 17, 2024

Overview
Labour and employment
Economic indicators
Construction and real estate

From pause in 2024 to propel in 2025

Winnipeg’s economy is expected to slow in 2024, with output rising by 1.1 per cent. However, momentum is projected to pick up in 2025, with economic growth reaching 2.6 per cent, followed by a 2.4 per cent increase in 2026.
The population has been growing rapidly, with another 2.7 per cent expansion expected in 2024. Immigration from overseas remains the biggest contributor, although net international migration is likely to cool over the forecast period.
The city’s labour force and employment trends are expected to follow similar patterns over the next few years. Both are projected to grow by 2.3 per cent in 2024 before moderating in 2025.
The unemployment rate is forecast to tick up to 5.1 per cent toward the end of the year, then dip below that level and stay there through 2028.
Consumer prices have become less burdensome on households. Winnipeg’s consumer price index is expected to increase by 1.8 per cent in 2024 and 2.3 per cent in 2025, then stabilize at the central bank’s 2.0 per cent inflation target by 2026.
Supply challenges persist in the residential market, especially for affordable housing. Demand for housing is being driven by Winnipeg’s expanding population.
Housing starts are expected to fall short of 2023 levels due to a weak start to the year but should still approach 4,900 units. Starts are then expected to gradually increase through 2028, beginning with 5,700 units in 2025.
An expanding list of non-residential investment projects, along with increased residential building activity, is expected to keep the construction sector busy in the coming years.
The provincial NDP government’s initial fiscal plan focused extensively on fulfilling healthcare and education campaign promises. Heightened investment in these sectors is expected to foster robust growth in Winnipeg’s non-commercial services.
Winnipeg’s diverse manufacturing sector is expected to contract slightly in 2024, yet its future growth prospects appear promising, bolstered by subsectors such as agri-food, transportation, and aerospace manufacturing.

Labour and employment

The labour market showed resilience to start the year, leading us to expect 2.3 per cent employment growth in Winnipeg for 2024. Employment is then projected to increase by 1.7 per cent in 2025 and 2.3 per cent in 2026.
Winnipeg’s labour force is expected to match employment growth in 2024, at 2.3 per cent. From 2025 to 2028, the workforce is projected to average an annual growth rate of 1.7 per cent.
The expanding labour force is closely tied to Winnipeg’s growing population. We anticipate the city’s population will expand another robust 2.7 per cent in 2024 before growth gradually returns to sustainable levels over the next few years.
The recent population surge is linked to immigration, particularly from overseas. Although a cooling trend is expected to start this year, net international migration is projected to remain high compared with historical standards, with a net inflow of about 24,500 people in 2024.
Retaining newcomers has been a persistent challenge for Winnipeg over the past several decades, however. This trend is unlikely to change over the next few years, as many immigrants choose to relocate to cities with bigger labour markets and more attractions.
The unemployment rate is expected to remain relatively stable over the next five years after a slight increase to 5.1 per cent in the fourth quarter of 2024. This uptick will be driven by various factors, including the anticipated end of the provincial gas tax holiday in late September.
Manufacturing employment is expected to bounce back from a 1.4 decline last year with job gains of 1.8 per cent this year, offsetting weakness in the primary and utilities sector.
The healthcare sector appears set for substantial job growth in the coming years. Employment is expected to increase by 4.8 per cent in 2024, followed by 3.3 per cent in both 2025 and 2026, driven in part by the city’s growing population and the rising number of retirees.
Winnipeg’s transportation and warehousing sector added about 1,200 jobs in 2023, fuelled by the ongoing development of the CentrePort Canada Rail Park. The city’s emergence as a shipping and logistics hub is expected to lead to average annual employment increases surpassing 3 per cent in transportation and warehousing over the next five years.
Both the wholesale and retail trade sectors are expected to see modest increases in jobs over the forecast period, but their employment outlooks for 2024 appear weak. Employment has been volatile in each sector since the pandemic.
Employment prospects for both the financial and professional services sectors are largely positive over the next five years. During this period, the financial services sector is expected to see an average annual employment increase of 2.2 per cent, while the professional services sector is projected to add 1.6 per cent more jobs annually.

Economic indicators

As in many other Canadian metropolitan areas, growth in Winnipeg’s economy is expected to slow in 2024, with output forecast to increase by a modest 1.1 per cent this year. However, economic growth is projected to rebound to 2.6 per cent in 2025 and average 2.4 per cent annually from 2026 to 2028.
Over the past year, inflationary pressures have eased significantly, partly due to the provincial gas tax holiday. We expect a 1.7 per cent year-over-year increase in consumer prices in the second quarter of 2024, a notable improvement from the 3.9 per cent surge a year ago.
By 2025, consumer price increases are anticipated to align with the Bank of Canada’s 2.0 per cent inflation target.
Wage growth, on a per worker basis, has rebounded strongly since the pandemic. Following annual gains exceeding 3.0 per cent in each of the past three years, wages per employee are expected to stabilize at an annual growth rate of 2.3 per cent between 2026 and 2028.
Household incomes have grown robustly over the past few years, but significant population gains have constrained per capita income growth. In 2023, the disparity between disposable income and disposable income per capita growth rates reached 4.2 per cent, the highest in Winnipeg’s documented history.
In 2024, real output in the services economy is expected to slightly outpace that of the goods economy, with the services sector expanding by 1.2 per cent and the goods sector growing by a more modest 0.5 per cent.
Winnipeg’s diverse manufacturing sector is projected to contract by 0.4 per cent in 2024 after three consecutive years of expansion. Future optimism for manufacturing is driven by potential growth in the transportation, agri-food, and aerospace subsectors. We anticipate manufacturing output will grow at an average annual rate of 2.8 per cent from 2025 to 2028.
Winnipeg’s central geographic location and the ongoing development of the CentrePort Canada Rail Park are pivotal for its transportation and warehousing sector. We anticipate a 2.1 per cent increase in 2024, followed by an average annual growth of 3.1 per cent from 2025 to 2028.
The NDP government’s first provincial budget, presented in April, prioritized healthcare. The effort to fulfill campaign promises is expected to lift healthcare output in Winnipeg over the medium term, with projected gains of 3.9 per cent in 2024, 3.3 per cent in 2025, and 3.1 per cent in 2026.
Education was also a priority in the provincial government’s fiscal plan, with increased spending aimed at enhancing educational outcomes across Manitoba. We anticipate Winnipeg’s educational services output will grow by 2.1 per cent in 2024 and 2.0 per cent in 2025, followed by average annual growth of 1.2 per cent over the subsequent three years.
Signal49 Research’s Index of Business Confidence declined once again in the first quarter of 2024. The sluggish run will continue to weigh on Winnipeg’s wholesale and retail trade output in 2024. Combined, wholesale and retail trade output is projected to decrease by 0.4 per cent this year, before rebounding with a 2.5 per cent gain in 2025.

Construction and real estate

Winnipeg has typically offered a more affordable cost of living than other major Canadian cities. However, residential supply issues are making it increasingly difficult for households to find affordable housing.
Following a sluggish first quarter, housing starts are forecast to reach about 4,900 units in 2024, with an increase to 5,700 units in 2025 and 6,000 units in 2026.
Multi-unit dwellings are constituting a significant portion of new residential builds. Multi-unit starts have maintained an annual share exceeding 60 per cent of total starts each year since 2018, and we anticipate this trend will persist through 2028.
The $55-million Market Lands project is targeting early 2026 for completion. Among the 95 housing units that will be created from this project, 48 are expected to be affordable rent-geared-to-income units.
Although non-residential investment does not feature any large-scale megaprojects, the CentrePort Canada Rail Park remains instrumental in solidifying Winnipeg as a central hub for western Canadian manufacturing. More companies are using the inland port for their shipping requirements.
Also, in May, the federal government promised another $31 million for the Southern Chiefs’ Organization’s Wehwehneh Bahgahkinahgohn project. At least parts of the redevelopment of the former Hudson’s Bay building are anticipated to open in 2026, coinciding with the building’s centennial anniversary.
True North’s Portage Place project is another initiative aimed at rejuvenating Winnipeg’s downtown core. The development would encompass areas for healthcare, housing, green spaces, and other amenities.
With the Hubble Space Telescope nearing retirement, the CASTOR telescope has emerged as a promising potential successor. Winnipeg would serve as the primary development site for the new telescope, with Canada contributing about 60 per cent of the total cost of roughly $480 million.
An increasing number of non-residential projects and robust demand from the city’s residential market are poised to drive growth in construction employment of an average of 2.7 per cent annually over the next five years.
Similarly, although construction output is projected to decline by 0.5 per cent in 2024, partly due to weaker housing starts, momentum is expected to pick up in 2025 with a 3.7 per cent increase, followed by an average annual expansion of 2.5 per cent from 2026 to 2028.