BMO Economics: Steady Growth for Diverse Economy in Manitoba

WINNIPEG, MANITOBA--(Marketwire - Jan. 17, 2013) - Manitoba's diverse economy should see growth above the national average in 2013, according to the Provincial Monitor report released today by BMO Economics. Growth in the province's economy is expected to reach 2.2 per cent this year.

"Energy and mining activity should maintain their momentum given still-high commodity prices," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Real oil & gas output rose at a near-18 per cent annualized rate over the past 7 years, the fastest pace of any province."

Manufacturing is steady thanks to a diverse industrial base, with shipments of machinery and transportation equipment posting solid growth in 2012. "Shipments of transportation equipment hit a record high in July, helped by strong global demand for passenger jets and public transit vehicles," stated Mr. Kavcic. "In the farm sector, the extreme drought across much of the U.S. Midwest this past summer has lifted many grain prices, allowing Manitoba farmers to reap significant income gains."

"Businesses are optimistic as evidenced by the investments that are being made across various industries in Manitoba," said John MacAulay, Senior Vice President, Prairies and Central Canada, BMO Bank of Montreal. "The manufacturing, construction, energy and mining sectors continue to attract new business investment and labour. Agriculture producers are looking for solid returns this year, which will bode well for economic activity."

Job growth has been sturdy over the past year, with employment up a modest 0.9 per cent in 2012. "A diverse economy, along with a relatively tight labour market with the third-lowest jobless rate in Canada at 5.2 per cent, continues to attract international migrants," noted Mr. Kavcic. "While population growth has cooled in the past year at just below 1 per cent year-over-year, it remains elevated by historical standards."

The Province of Manitoba revised its deficit forecast to $567 million in fiscal 2012-2013 (about 1 per cent of GDP) from $460 million projected in this year's budget. Total revenues are tracking $45 million (0.3 per cent) better, largely due to higher individual and corporate income tax receipts. Finance Minister has hinted that the Province will likely have to push back its balanced budget target by two years to 2017 - look for detailed forecasts in the spring (fiscal 2013-2014) budget.

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 $525 billion as at October 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.