The Stel Salaried Pensioners Organization wishes to
thank The Hamilton Spectator for permission to post the following article by
Reporter Deirdre Healey published in the April 7, 2006 edition
By Deirdre Healey
The Hamilton Spectator
(Apr 7, 2006)
Hamilton's economy will ride the coattails of steel this
year.
A strong demand for steel will lead to a 2.5 per cent boost
in the local economy, according to the Spring 2006 Conference Board's Metropolitan
Outlook released yesterday.
"This is a great year for steel," said Alan
Arcand, senior economist and author of Hamilton Outlook. "Hamilton's
overall bottom line will go up from 2.1 per cent last year and the difference
is the steel sector."
A price jump in 2004 prompted steel users to stock up on
steel before the prices climbed higher, Arcand said. This led to a soft demand
for steel in 2005. But now those stocks are becoming depleted, which is good
news for companies like Dofasco and Stelco.
"Users will work off their inventory this year and
demands will pick up," he said.
It is predicted the steel boom will last through 2007, he
said.
This is a contrast to 2005, which was a year of uncertainty
for Hamilton with Stelco in bankruptcy protection.
"This is good news," said Neil Everson, executive
director of Hamilton's economic development. "The better Stelco and
Dofasco do, the better it is for the community."
Everson said there are many spin-off businesses in the city
that benefit from the local steel industry's success.
Hamilton Mayor Larry Di Ianni was happy to hear the positive
forecast, but still stressed the importance of diversifying the local economy
beyond steel.
"We know there are hills and valleys as far as the
manufacturing sector is concerned," Di Ianni said.
Even with the anticipated steel boom, Hamilton's economy is
still resting near the bottom of the barrel.
According to the Conference Board report, the city's
anticipated economic growth is second lowest in the province and 14th out of 20
cities in the country.
It's unlikely Hamilton's large manufacturing sector will be
able to pull the city up in ranking without help from the province, said Wayne
Fraser, Ontario-Atlantic director of the United Steelworkers.
Local industries, including steel, will still struggle to
compete nationally and internationally this year because of high energy costs
and the soaring Canadian dollar, Fraser said.
There have been more than 80,000 manufacturing jobs lost in
Ontario over the last year and more then 1,500 lost in Hamilton alone.
"The manufacturing sector is in a disastrous state
right now," he said. "Plant after plant keeps closing and jobs are
being killed off by the thousands," he said. "We are losing jobs to
Mexico and China because we can't compete with people making 50 cents an hour.
Soon there won't be any manufacturing jobs left if the province doesn't do
something."
Provincial Conservative leader John Tory was in Hamilton
yesterday to visit a local business to see what Ontario should be doing to
create a profitable environment.
He toured Arzon, a Hamilton company that manufactures heat
transfers for vehicles and engines to be sold internationally, and questioned
the president and senior management on what changes should be made.
Tory said he found one of the biggest concerns was
fluctuating energy prices. Companies need to be able to budget and accurately
price production for customers and that can't be done with fluctuating energy
prices, he said.
Tory criticized Premier Dalton McGuinty for promising to
shut down coal plants in 2007 before finding a replacement energy source.
"That leaves plants vulnerable to the possibility of a
lack of power down the road," he said. "There is enough going on that
they don't need unreliable energy sources."
Energy supply and costs are huge factors in the production
of steel in Ontario, said Jayson Myers, senior economist with Canadian
Manufacturers and Exporters.
"What the province has in mind in terms of energy
supply and electricity generation will be a major issue for all steel
manufacturers."
dhealey@thespec.com
905-526-3468