WINNIPEG, MANITOBA--(Marketwire - Oct. 9, 2012) - Manitoba's diverse economy should see growth of 2.6 per cent this year amid a rebound in farm output, according to the Provincial Monitor Report released today by BMO Economics. Growth is expected to moderate somewhat to 2.3 per cent in 2013 - still above the national average.
"After the flooding seen in 2011, conditions were much better this year and led to a rebound in output," according to Robert Kavcic, Economist, BMO Capital Markets. "Additionally, extreme drought across much of the U.S. Midwest this summer has lifted many grain prices, allowing Manitoba farmers to reap significant income gains."
Meantime, energy and mining activity should maintain their momentum given still-high commodity prices. "While still a small share of overall economic output, real oil & gas output rose at a near-18 per cent annualized rate over the past 7 years - the fastest pace of any province," noted Mr. Kavcic.
"Business optimism can be most clearly seen by the number of investments that are being made across all sectors of Manitoba's diverse economy," said Lynda Taylor, Vice President, Manitoba and Northwestern Ontario, BMO Bank of Montreal. "The manufacturing, construction, energy and mining sectors continue to attract new business investment and labour. Additionally, agriculture producers are looking to benefit from a good growing season and solid returns this year, which will bode well, overall, for economic activity and growth."
Mr. Kavcic noted that manufacturing continues to recover from the recession, with shipments of machinery and transportation equipment seeing solid growth in recent months. "Shipments of transportation equipment have hit a record, helped by strong global demand for passenger jets and public transit vehicles."
Job growth has cooled over the past year, with employment up a modest 1.6 per cent year-over-year in September. "Public-sector employment has slipped nearly 5 per cent from its late-2010 high as the Province seeks to restrain spending and eliminate its budget deficit," stated Mr. Kavcic. "Private employment is up a more robust 4.0 per cent year-over-year, led by gains in transportation, professional services and education. A diverse economy, a tight labour market with the 3rd lowest jobless rate in Canada at 5.0 per cent, and the Provincial Nominee Program continue to attract international migrants. While net interprovincial migration is still negative, a record 14,500 net international migrants over the latest 4 quarters has more than made up the difference, keeping population growth running at an elevated pace. This trend should continue to support retail sales and housing."
The full Provincial Monitor can be downloaded at www.bmocm.com/economics.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $542 billion as at July 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.