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WINNIPEG, January 12, 2011 – While Manitoba's economy was held back in 2010 with wet weather affecting the agriculture sector, growth should pick up to a 2.7 per cent pace in 2011, helped by sturdy population growth, according to the Provincial Outlook report issued today by BMO Capital Markets Economics.
Longer term, the province's diverse sector makeup and exposure to a wide range of commodities should continue to foster slow but sturdy economic growth. “Manitoba finished 2010 with Canada's lowest unemployment rate of 5.2 per cent, and population growth has picked up to 1.6 per cent year-over-year from sub-1 per cent growth over the past decade, now running ahead of the national rate,” said Robert Kavcic, Economist, BMO Capital Markets. “Firmer population growth should support steady growth in consumer spending and residential construction—Winnipeg house prices are currently seeing among the fastest growth rates among Canada's major cities, up 12.2 per cent year-over-year in November.”
“Our business customers, including our agri-business partners, have weathered a challenging period, but are expressing confidence that consumer spending, construction, and solid commodity prices will provide a good foundation for growth in 2011,” said Rick Jaques, District Vice-President, Manitoba, BMO Bank of Montreal. “We continue to assist our customers as they look to invest in upgrading their businesses and retool for future growth.”
The Province of Manitoba is projecting a $471 million summary deficit in fiscal 2010/2011, an improvement from the $545 million shortfall projected in the budget. At about 1 per cent of GDP, Manitoba's deficit is relatively small, and a moderation in spending growth and a gradual economic recovery should let the province to grow its way back into the black. The budget projection estimated a return to surplus in fiscal 2014/2015, which assumes a slowdown in overall spending growth to 1.8 per cent per year over the forecast horizon.
The complete report can be found at www.bmocm.com/economics.
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Media Contacts:
Ronald Monet, Montreal, ronald.monet@bmo.com, (514) 877-1873
Sarah Bensadoun, Montreal, sarah.bensadoun@bmo.com, (514) 877-8224