London Faces Highest Unemployment Rate in Canada

London’s unemployment rate has risen to 9.1 per cent, making it the highest in Canada after losing 3,000 jobs in March, and a recent forecast indicates that the local economy will experience minimal growth this year.

A report from Signal 49, previously known as the Conference Board of Canada, states that economic activity in London is expected to stay “muted” through 2026 before showing signs of improvement in 2027.

Even though there was a stronger performance than anticipated in 2025, economist David Ristovski mentioned that momentum diminished towards the end of the year, mainly due to weaknesses in manufacturing related to U. S. tariffs and ongoing uncertainties.

“There was a slowdown toward the end of last year,” Ristovski said. “What we’re seeing now is that has carried over into this year.”

In total, London added about 6,700 jobs overall in 2025; however, the goods-producing sector, including manufacturing, lost roughly 5,900 positions.

This weakness is likely to persist shortly with only around 1,100 jobs predicted to be added in 2026.

David Ristovski is an economist with Signal 49 (formerly known as the Conference Board of Canada) (Signal 49 Research )

The reasons behind the high unemployment rate and low job forecasts for this year include pressures on the manufacturing sector which Ristovski noted accounts for approximately 10 to 12 percent of the local economy. Additionally, there’s a population decline linked to changes in federal immigration policies and fewer international students coming in.

Ristovski pointed out that London’s population fell by 0.2 percent last year and he anticipates a similar trend for this year and into 2027.

Recovery Anticipated Soon

The economy of the London region is projected to grow by about 2.4 percent between 2027 and 2030 according to Ristovski.

Signal 49 believes that trade relations with the U. S. will start improving towards late this year coinciding with their midterm elections.

The manufacturing sector is expected to take charge as production at Volkswagen’s EV plant in St. Thomas begins ramping up next year according to him.

A drone image dated Oct. 2, 2025 shows foundation work underway at Volkswagen subsidiary Power Co’s gigafactory site in northeast St. Thomas, Ont. (Handout Power Co Canada)

“That will bring thousands of both indirect and direct jobs especially within the electric vehicle supply chain in the region,” he said. “That will positively impact manufacturing but also other sectors closely tied to manufacturing such as wholesale trade along with transportation and warehousing.”

The healthcare industry should also perform well as London’s aging population will require more services over time according to him.

Ristovski also mentioned that rising housing starts could lead to increased activity within construction.

Signal 49 plans on keeping an eye on U. S.-trade developments throughout all of next year since it’ll be “really be the major driver of this rebound,” he explained.

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