CHICAGO, IL--(Marketwired - Apr 25, 2014) -
- BMO Economics Special Report on Great Lakes region says economic activity will bounce back in 2014, reaching 2.9 percent real GDP growth in 2015
- Rising auto sales gives strong economic support
- Foreclosure rates have fallen sharply and home construction is up
Economic growth remains solid in Indiana as the state boasts impressive job growth and the auto-sector continues to expand according to a special report released today by BMO Economics on the economic output from the Great Lakes region. The report, North America's Economic Engine, was released to coincide with the Council of Great Lakes Governors meeting, taking place in Chicago on April 25-26, 2014.
The report notes that the region is a major driver of North American economic output, employment and trade, accounting for nearly a third of combined Canadian and U.S. output, jobs and exports.
"The Great Lakes region has so much going for itself with transportation infrastructure, advanced manufacturing, research and development, digital manufacturing, strong locally-rooted financial institutions, and some of the world's best post-secondary institutions," said Ambassador David Jacobson, Vice-Chair, BMO Financial Group. "The discussions over the next two days in Chicago will allow us to explore opportunities to create jobs, strengthen trade, open doors to new discoveries, and drive innovation and prosperity for all in the region."
According to the report, real GDP for the state should expand a slightly above-average 2.8 percent in 2014, before picking up a further 2.9 percent in 2015. Employment continues to recover in Indiana, up 1.6 percent year-over-year in March.
"Nonfarm payrolls in Indiana are now close to pre-recession levels, which is a rarity in a region that is fairly manufacturing-heavy," said Michael Gregory, Head of U.S. Economics, BMO Capital Markets. "The rebound in the auto sector has played a major role, with durable goods manufacturing employment adding more than 60,000 positions since early 2009. The service sector, however, has been the primary contributor, with strong gains in transportation and warehousing, retail trade and finance."
With strong job growth, the unemployment rate has fallen to 5.9 percent -- down two percentage points from a year earlier -- and should be closer to 5.7 percent in 2015.
"The auto sector has played a large role in Indiana's growth. With U.S. sales rising to their best level in nearly six years in 2013, we saw a solid 7.8 percent year-over-year gain in auto production in the third quarter of last year," said Mr. Gregory. "The level of output is providing a strong support to Indiana's industrial base."
Home prices are recovering, with the Federal Housing Finance Agency (FHFA) index up one percent year-over-year in the third quarter of 2013 -- up three percent from the recession low. The foreclosure rate has dropped in the past year, down a full percentage point, and close to the national average at 3.1 percent. The healthier economic backdrop has helped construction activity, with housing starts totaling nearly 18,000 units in 2013, and increase of 29 percent from the prior year.
To view a full copy of the report, visit www.bmocm.com/economics.
About BMO Capital Markets
BMO Capital Markets is a leading, full-service North American financial services provider, with more than 2,300 employees operating in 16 North American offices and 29 worldwide, offering corporate, institutional and government clients access to a complete range of investment and corporate banking products and services. BMO Capital Markets is a member of BMO Financial Group (NYSE: BMO) (TSX: BMO), one of the largest diversified financial services providers in North America with US$532 billion total assets and more than 45,500 employees as at January 31, 2014.
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 $593 billion in assets (as of January 31, 2014).