ST. LOUIS, MO--(Marketwired - Aug 14, 2014) -
- Investment in the auto sector continues
- Payroll growth broad based, although jobless rate is edging higher
- Housing starts had a volatile winter but now at best level in seven years
The Missouri economy continues to grow at a modest pace, according to the bi-annual U.S. State Monitor Report from BMO Economics. While real GDP only expanded 0.8 percent in 2013, growth is expected to improve to 1.8 percent in 2014 and 2.4 percent in 2015.
"While all our indicators may not be where we'd like, there has been a lot of progress made that will bolster our whole economy," said David Warning, Managing Director, Commercial Banking, St. Louis, BMO Harris Bank. "The fact that growth is expected to improve shows that business owners are taking the right steps."
Employment continues to expand at a solid clip, and is near pre-recession levels. Nonfarm payrolls were up 1.6 percent year-over-year in the second quarter of 2014. The gains are led by manufacturing and a number of service industries including leisure & hospitality, professional services and finance.
Despite solid job growth, the unemployment rate edged up to 6.5 percent in June, or 0.5 percentage points higher than at the end of 2013. The rate is now again above the national average after outperforming during the downturn and early stages of the recovery.
"This largely reflects a pickup in labor force growth and a stable participation rate since mid-2012, a period over which the national rate has fallen and helped pull the jobless rate down," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Still, with below-average growth in hours worked and earnings, the overall labor market picture in Missouri is slightly below the median across all the states."
The Missouri housing market performed much better than some states during the housing bubble. As a result, the downturn was far less severe as prices fell a relatively modest 10 percent peak-to-trough according to the FHFA (Federal Housing Finance Agency) index -- compared to 18 percent nationally. Consequently, prices are now rising at a less robust pace than in some other harder-hit states. Housing starts had a volatile winter, but have since risen to the best level in seven years.
Real agricultural output rebounded nearly 18 percent in 2013 after the worst drought in about half a century crippled output in 2012. This year, the harsh winter delayed spring planting in much of the Midwest, but many crops have caught up to five-year averages.
In the auto sector, recent announcements have been positive with Ford expanding in Kansas City and GM increasing investment at its Wentzville plant.
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, Nevada, 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 $582 billion in assets (as of April 30, 2014).