WINNIPEG, MANITOBA--(Marketwired - Oct. 30, 2013) - Manitoba's diverse economy is holding steady with growth above the national average, according to the Provincial Monitor report released today by BMO Economics.
"Real GDP is expected to come in at 2.0 per cent in 2013, before a stronger U.S. economy lifts growth to 2.3 per cent in 2014," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Stability remains one of Manitoba's key economic strengths, and this year is a prime example - while manufacturing continues to face soft U.S. demand, the agricultural sector is enjoying another solid year."
After rebounding strongly from two years of tough conditions in 2012, the agriculture sector is enjoying another solid year in 2013. "Statistics Canada's estimates point to strong gains in wheat and canola production this year," noted Mr. Kavcic. Meanwhile, energy and mining continue to see solid momentum in the province; oil production has risen fourfold since the start of the 2000s, reaching 18 million barrels last year.
"Agriculture continues to perform well and businesses are increasingly optimistic about forecasts," said John MacAulay, Senior Vice President, Prairies Central Canada Division, BMO Bank of Montreal. "Overall, with historically low interest rates, it's a good time for small businesses to continue to invest in their operations and take advantage of Manitoba's diverse economy and above average prospects for growth heading into 2014."
Manufacturing has cooled of late, as the U.S. economy has yet to see growth pick up to a pace that would drive a notable upturn in Manitoba's exports. "The sector should find better momentum in 2014 as U.S. economic growth ramps up toward 3 per cent and state finances allow for increased spending," stated. Mr. Kavcic.
On the employment side, job growth is slightly below levels seen a year ago. "Public-sector employment is on pace to decline for a third straight year amid ongoing fiscal restraint, while construction employment has softened after surging in late-2012," said Mr. Kavcic. "The jobless rate, though, has held steady at a well below-average 5.5 per cent in September."
In the housing market, homebuilders have been responding to firm population growth and housing demand, with housing starts in the third quarter at the highest level since the late-1980s. A decent job market and firm population growth continue to support consumer spending, although retail activity was choppy around the July 1st sales tax increase.
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 $549 billion as at July 31, 2013, and more than 46,000 employees, BMO Financial Group provides a broad range of personal and commercial banking, wealth management and investment banking products and solutions.