News Releases

WINNIPEG, MANITOBA--(Marketwire - Oct. 12, 2011) - Despite severe flooding weighing on crop production, firm activity in resources and manufacturing will support 2 per cent real GDP growth this year in Manitoba, according to the Provincial Monitor report released today by BMO Capital Markets Economics.

"Manufacturing continues to perform well with shipments up 8.1 per cent year-over-year through July," said Robert Kavcic, Economist, BMO Capital Markets. "Energy and mining activity should also maintain their momentum if commodity prices can hold up, after real oil and gas production jumped 14 per cent in 2010."

While this year's Assiniboine River flooding is expected to cost the Province an estimated $200 million, and hold crop production relatively flat compared to last year's very depressed level, normalization of agricultural activity should see Manitoba's growth pick up slightly to 2.1 per cent in 2012.

Mr. Kavcic also noted the implications for Manitoba's economy of the return of the Winnipeg Jets. "Rather than a new hockey team bringing strength to the local economy, one can argue that a strong economy is bringing in the hockey team," said Mr. Kavcic. "In Canada more broadly, the strong dollar, steady consumer demand and a healthier fiscal position vis-à-vis the U.S. are in stark contrast to the mid-1990s when the Jets flew south. At the regional level, it's little coincidence that the Jets are relocating where they are. The Canadian Prairies are enjoying some of the best economic prospects in the country, tight labour markets and strong population growth. Indeed, Manitoba had near the lowest jobless rate in Canada at 5.5 per cent in September, and population growth is running at the fastest pace since the mid-1980s."

"Our business customers have experienced challenges, particularly our agri-business partners who faced two straight years of floods," said Lynda Taylor, Vice-President, Manitoba and Northwestern Ontario, BMO Bank of Montreal. "But we continue to hear them express confidence in Manitoba's strong economy. We stand ready to assist our customers as they look to invest in upgrading their businesses and retool for future growth."

Manitoba's Public Accounts reported a deficit of $298 million in fiscal 2010-2011 (0.6 per cent of GDP), $169 million lower than the $467 million estimated in this year's Budget, reflecting higher-than-estimated revenues and lower expenses. "Deficits will continue for another two years – $345 million in fiscal 2012-2013 and $146 million in fiscal 2013-2014 – before a $185 million surplus is projected for fiscal 2014-2015," said Mr. Kavcic.

The full Provincial Monitor report can be downloaded at bmocm.com/economics.