London’s economy will slip this year before Volkswagen battery plant helps to raise fortunes in 2027: Report

A new report says London’s economy will only grow by 0.9% in 2026. Sean Irvine reports

London’s economy is set to sputter in 2026.

That conclusion is from Signal 49 Research, formerly known as the Conference Board of Canada.

Its new report shows the Forest City’s economy is close to sinking beneath the waves. But for now, remains above water.

“We’ll see growth slow this year to 0.9 per cent (in London),” said David Ristovski, economist and author of the report.

That compares with 2.3 per cent in 2025.

Ristovski explained there are multiple reasons why output has dipped, with U.S. tariffs representing the largest factor.

“The ongoing uncertainty around tariffs and the trade situation with the U.S.”

While the manufacturing sector will continue to be hard hit, other sectors will feel the pinch as the city’s unemployment rate reached nearly nine percent (8.8 per cent February 2026).

That is the highest level since the pandemic. But, that’s the bad news.

The good news is Ristovski does not expect the dip to last too long.

“We are calling for a rebound in economic activity in 2027,” he said.

An anticipated easing of U.S. tariffs and growth in construction and healthcare will add to spinoffs from the Volkswagen/Power Co. EV battery plant in St. Thomas.

Ristovski cannot understate the impact of the latter.

“It should bode well for the region’s construction sector, as well as the manufacturing sector. And that positivity will also seep into other sectors such as transportation and warehousing,” he said.

However, should the plant be delayed or open under anticipated capacity levels, London’s economic model could change, Ristovski agreed.

While there are no indications that the facility is anything but full steam ahead, he said its success is at the centre of economic projections in the London region.

“To remove that from the equation, then we would see a bit more of a bleak output, especially within employment as well as production,” he said.

However, if things go as planned, London is on track to become an economic leader in the near future.

“We do expect the London region to outperform many, many of the other CMAs (Census Metropolitan areas) within Canada,” Ritovski concluded.