CHICAGO, IL--(Marketwired - Apr 25, 2014) -
- BMO Economics Special Report on Great Lakes region says economic activity will bounce back in 2014
- GDP growth on par with national average last year, but will pick up the pace in 2014 and 2015
The Minnesota economy will continue to grow at a modest pace supported by solid labor market performance, 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 reports 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."
In Minnesota, real GDP grew 1.7 percent in 2013, close to the national average. Growth is expected to pick up at a 2.9 percent pace this year and inch slightly higher to three percent in 2015.
The state has a relatively healthy labor market, with 1.6 percent year-over-year payroll growth in March. The jobless rate -- already among the lowest in the U.S.at 4.8 percent -- is projected to reach 4.1 percent in 2015.
"Nonfarm payrolls have pushed to a record high in recent months, an impressive recovery from the recession and one that has outperformed most other Midwest states," said Michael Gregory, Head of U.S. Economics, BMO Capital Markets. "Recent gains in Minnesota have been seen across the spectrum of service-sector industries, including transportation, finance, professional services and leisure and hospitality."
The housing market is recovering in Minnesota; home prices across the state are up a healthy 5.3 percent year-over-year in the fourth quarter of 2013, according to the FHFA (Federal Housing Finance Agency) index. According to the S&P Case-Shiller Index, Minneapolis prices rose 9.4 percent year-over-year in January -- not as strong as the some of the double-digit gains seen in some other major cities, but the state had not experienced the same downturn. The state-wide foreclosure rate sits below-average at 1.2 percent, and vacancies are low.
The report also notes that exports levelled off last year as machinery shipments softened, but momentum picked up to a 5.9 percent year-over-year pace by the fourth quarter.
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).