BMO Financial Group
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BMO Financial Group

October 16, 2014 09:24 ET

BMO Economics: Manitoba Economy to Pick Up Alongside Broader Improvement in Canadian Growth

- Real GDP growth of 2.2 per cent expected in 2014, 2.4 per cent in 2015 (Canadian real GDP growth of 2.3 per cent expected in 2014, 2.4 per cent in 2015)

- Manufacturing should receive boost from weaker dollar, stronger U.S. demand

- Oil production up fourfold since start of 2000s

WINNIPEG, MANITOBA--(Marketwired - Oct. 16, 2014) - Real GDP growth in Manitoba is expected to slip to 1.8 per cent in 2014 from 2.2 per cent last year, but pick up again to 2.4 per cent in 2015 alongside a broader improvement in Canadian growth, according to the Provincial Monitor report released today by BMO Economics.

"While manufacturing output has fallen in four of the past five years, it is poised to get a boost in the year ahead from the weaker Canadian dollar and stronger U.S. demand," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Transportation equipment shipments have already begun to pick up, with orders rolling in from various municipalities for public transit and from U.S. cities. A much-improved fiscal situation across many U.S. states has removed another headwind from the sector."

Mr. Kavcic noted that exports also have gained momentum, up 17 per cent year over year in the three months through August, to a near-record level. Meanwhile, output in the Agriculture sector is pulling back this year after a record crop in 2013.

"Energy and mining also continue to see solid momentum in the province," stated Mr. Kavcic. "While still a small share of the overall economy, oil production has risen fourfold since the start of the 2000s."

Employment in Manitoba is down 0.5 per cent year-over-year through September; most of the weakness has been in the private sector. "The jobless rate, however, continues to hold steady in the 5 per cent to 5.7 per cent range, among the lowest in Canada," said Mr. Kavcic. "Population growth remains at historically strong levels, picking up to 1.3 per cent year over year in the third quarter of 2014. That continues to support housing demand, though housing starts have rolled over after hitting the highest level since the late-1980s in 2013."

"Although the manufacturing sector has suffered in the past, business owners operating in this space remain cautiously optimistic heading into 2015," said John MacAulay, Senior Vice President, Prairies and Central Canada Division, BMO Bank of Montreal. "The good news is that our clients are generally optimistic about the state of the economy. In fact, a recent BMO survey - conducted ahead of Small Business Month - revealed business owners in the Prairies are more confident in the state of the economy and their business prospects compared to six months ago."

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 financial services organization based in North America. The bank offers a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers. BMO Financial Group had more than $586 billion in total assets and approximately 47,000 employees at July 31, 2014.

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