Windsor economy expected to stall in 2026 amid tariff concerns: report

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The economy in the Windsor area is projected to come to a stall in 2026, according to an economist with Signal49 Research.

The group, formerly known as the Conference Board of Canada, has released its outlook for Windsor’s economy for the remainder of this year and into 2027.

Signal49 Research economist David Ristovski says U.S. tariffs remain the key talking point heading into 2026, and the uncertainty is expected to lead to an overall slowdown in economic activity. The report projects growth of 0.6 per cent this year, effectively bringing the region’s economy to a stall.

Despite slowing toward the end of 2025, Windsor’s economy grew by 2.3 per cent for the year, performing better than expected. The report notes the city’s manufacturing sector held up relatively well and appeared to have weathered most of the impacts of U.S. tariffs.

Manufacturing output rose 2.3 per cent in 2025, while employment in the sector jumped 16.4 per cent. Approximately 7,200 net new manufacturing jobs were added last year, driven largely by the opening of the NextStar Energy battery manufacturing plant.

Ristovski says trade tensions with the United States are expected to ease toward the end of this year, with a rebound in economic activity anticipated in early 2027.

“There are some downside risks overall that are impacting the short-term outlook for Windsor,” he said. “Manufacturing makes up roughly 25 per cent of Windsor’s economy, so any prolongation or escalation in the trade situation with the United States will have a negative impact.”

The report projects a more positive outlook for Windsor’s construction sector over the next few years, despite major projects such as the NextStar plant and the Gordie Howe International Bridge winding down.

“The sector will get a rather large boost from ongoing construction projects such as the interchange at Banwell Road and E.C. Row Expressway, a large commercial development by Rock Developments in east Windsor, as well as the Lauzon Plaza, just to name a few,” Ristovski said.

Housing starts are expected to moderate this year, with builders projected to break ground on 1,190 units. However, the region’s housing market is forecast to gain momentum beginning in 2027.

“There are several residential developments that are supporting our housing starts and overall construction forecast,” Ristovski said. “For example, Windsor’s development and heritage standing committee has approved an application for an $80 million, 27-storey mixed-use development in the downtown core, which includes about 188 rental units.”

The report also notes short-term pressure on the local economy due to downgraded population growth projections. Windsor’s population is expected to decline by 0.6 per cent this year — equivalent to about 3,000 residents — followed by another 0.4 per cent drop in 2027.

That decline is expected to weigh on several sectors of the local economy, particularly those dependent on students, as much of the population slowdown is attributed to a decrease in non-permanent residents.