MINNEAPOLIS/ST. PAUL, MN--(Marketwired - Feb 4, 2014) -
- Labor market healthy with gains across various sectors
- Manufacturing and export growth moderate
- Housing recovery taking room with home prices on an upward trend
Minnesota's economic growth continues at a modest pace as cooler export activity offsets a continued solid labor market, according to the bi-annual U.S. State Monitor Report from BMO Economics.
Real GDP likely grew 1.7 percent in 2013, close to the national average, but should pick up to a 2.9 percent pace in 2014 and be on par with projections for national GDP.
"We continue to see steady and persistent growth among business," said Todd Senger, Regional President, Minnesota, BMO Harris Bank. "While some caution still exists about the economic environment, businesses are feeling confident that they have weathered the worst and are looking to move forward with expansion and increased activity."
Minnesota boasts a relatively healthy labor market, with payroll growth a solid 1.7 percent year-over-year in December and the jobless rate among the lowest in America at 4.6 percent in November.
"Nonfarm payrolls have pushed to a record high in recent months, an impressive recovery from the Great Recession that has outperformed most of its Midwest peers," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Gains have been seen across a wide range of industries such as transportation, finance, professional services, manufacturing, and leisure and hospitality."
The housing recovery is taking root in Minnesota with home prices across the state up a healthy 6.1 percent year-over-year in the third quarter of 2013, according to the (Federal Housing Finance Agency) FHFA index. The state-wide foreclosure rate is well below average and vacancies are low.
"With a healthy labor market and solid population growth for the Midwest, home building is also on the rise," said Mr. Kavcic.
Housing starts averaged a 15,400 unit/year pace through November of 2013, marking a healthy recovery from the recession when building activity fell as low as 8,600 units in 2011.
"Meantime, Minnesota's export activity has leveled off in recent quarters, up a modest 1.7 percent year-over-year in the third quarter of 2013, as machinery shipments have softened," added Mr. Kavcic.
To view a full copy of the report, visit www.bmocm.com/economics.
About BMO Harris Bank
BMO Harris Bank provides a broad range of personal banking products and solutions through more than 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. For more information about BMO Harris Bank, go to the company fact sheet. Banking products and services are provided by BMO Harris Bank N.A. and are subject to bank or credit approval. BMO Harris Bank® is a trade name used by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with approximately 1,600 branches, and CDN $537 billion in assets (as of October 31, 2013).