WINNIPEG, MANITOBA--(Marketwire - May 3, 2012) - Manitoba's diverse economy should see growth of 2.6 per cent this year - outpacing the national average - according to the Provincial Monitor Report released today by BMO Economics.
"Assuming the weather cooperates, the farm sector should bounce back in 2012 from depressed levels seen last year," said Robert Kavcic, Economist, BMO Capital Markets. "Manufacturing continues to recover from the recession, with shipments of machinery and transportation equipment seeing solid growth in recent months."
Energy and mining activity should maintain their momentum given still-high commodity prices. "Oil production has risen sharply in recent years, with output jumping more than 20 per cent in 2011 to the highest level on record," stated Mr. Kavcic. "Oil now accounts for about 45 per cent of real mining output, up from 20 per cent in 2004. Energy exports were up nearly 30 per cent year-over-year in the last three months."
Job growth remains steady in the province, with private-sector employment up 2.3 per cent year over year in the first quarter, offsetting weakness in the public sector as the Province restrains spending. "Persistent strength in construction and in the broad service sector have smoothed out overall labour market performance, and kept the jobless rate near the lowest in Canada, at 5.3 per cent in March," 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, our agriculture producers are looking to a strong growing season and solid returns this year, which will bode well, overall, for economic activity and growth."
The provincial government is projecting a $460 million budget deficit in fiscal 2012-2013 (0.8 per cent of GDP), a significant improvement over the prior-year shortfall of $1.1 billion. The shortfall last year, however, was exaggerated by flood-related expenditures of more than $300 million (net of Federal assistance), so the year-over-year improvement is not quite as dramatic as it appears. The Province continues to target a surplus in fiscal 2014-2015, but the cumulative deficit between fiscal 2011-2012 and fiscal 2014-2015 is now $1.7 billion versus the $744 million projected in last year's budget.
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 $538 billion as at January 31, 2012, and more than 47,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.