News Releases

WINNIPEG, June 25, 2009 – The Manitoba economy has leaned on its diversity to weather the recession relatively well, according to the Provincial Outlook report from BMO Capital Markets Economics.

“Real GDP will likely contract a better-than-average 1.4 per cent this year, before returning to 1.6 per cent growth in 2010,” said Robert Kavcic, Economist, BMO Capital Markets.

Construction activity has remained a pillar of strength this year, and should continue to support the economy through 2010. In addition to still-strong public infrastructure spending, residential construction has held up better than in most provinces. Indeed, average home prices have not budged from year-ago levels, while sales are down a modest 15 per cent from their peak.

“While Canadian manufacturing continues to grapple unsuccessfully with sputtering U.S. demand, Manitoba's diverse manufacturing sector is putting up a formidable fight, led by machinery and transportation equipment,” noted Kavcic. “However, the sharp correction in commodity prices has taken some steam out of exploration and mining activity in the province.”

Manitoba's fiscal 2009/10 budget took a balanced approach against a weakening economic backdrop, offering modest spending growth and continued gradual tax relief. The Province is projecting a $48 million summary surplus for fiscal 2009/10, down from an estimated $316 million surplus in fiscal 2008/09.

The complete report can be found at www.bmocm.com/economics.

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