London’s Economy is Built on Diversity & Stability

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By Meredith MacLeod

Key sectors of healthcare, education, agri-food, advanced manufacturing, finance and technology leading growth in the Southwestern Ontario City.

The city built around insurance and banking is far from a single-sector town anymore. “London has a stable economy built on diverse economic clusters,” said Kapil Lakhotia, president and CEO, London Economic Development Corporation (LEDC). “We continue to see rapid growth in digital creative, life sciences and food and beverage processing.”

Overall, London’s economic structure earns 0.93 on a diversity scale of 1.00, according to the Conference Board of Canada. To compare, Kitchener-Waterloo-Cambridge scores 0.87, Windsor 0.79, Kingston 0.86 and St. Catharines 0.89.

Added to that, London’s GDP growth was among the strongest in the province over the past three years.

London’s agri-food hub is led by Cargill, Summit Foods, Labatt and Dr. Oetker, thanks to affordable commercial land, combined with ready access to water and agricultural products and strong highway corridors to major markets.

Manufacturing has rebounded from the deep hit of the recession, thanks in

large part to the automotive industry, with Formet Industries and General Dynamics Land Systems Canada leading the way. That has boosted transportation and warehousing and construction is also strongly recovering. The city hit a record for building permits in 2016, driven primarily by the residential and institutional sectors, including large projects at Western University and Fanshawe College.

London also has a thriving digital media sector, a massive medical and research field and a growing range of technology startups. “All of that is fuelling a boom of repurposing buildings in the city’s downtown,” says Jim Smith, president of the London and St. Thomas Association of Realtors (LSTAR).

“The market has been pretty robust the past few years,” said Peter Whatmore, CBRE’s executive managing director for southwestern Ontario. The retail and industrial sectors have been particularly solid and the city has an “incredible stable of employers like the university and hospitals and the spinoffs of both.”

Commercial realtor Rick Gleed says London offers a huge opportunity to add value to vacant or underused properties. He’s working on doing that with a large but underperforming plaza at Wellington and Southdale that will be torn down and rebuilt. He also points to former bars on Ridout Street being converted into residences for young mothers and office space for a non-profit.

“It’s an opportune time to invest in London, in a value-added city. There are lots of opportunities here for people who are creative and innovative,” he said.

“We have all the commodities of an amazing, dynamic city but we have to make use of it all.”

That means figuring out London’s value proposition – what it offers that no other municipality can match – in order to drive long-term growth.

London has plenty going for it, along with a council that is welcoming to investors, says Smith at LSTAR. Land prices are low compared to the GTA, Kitchener-Waterloo and Guelph, the city credits back development charges, and the 401 and 402 corridors are free of congestion, he says.

“London is a wonderful, stable community with so much to offer investors willing to look its way.”