Manitoba growth rate to lead country: report

March 12, 2008
Winnipeg Free Press
Written by: Martin Cash

The Conference Board of Canada says it expects the Manitoba economy will grow by a red hot 3.7 per cent in 2008, the highest rate in the country.

The latest encouraging forecast for the province highlights the fact that its manufacturing sector, led by buses and aerospace, is expected to continue to grow at 5.6 per cent in '08 while Central Canada's manufacturing companies are being hit with layoffs and slowdowns.

Continuing strong base metal prices mean the mining industry remains in growth mode and hearty agricultural commodity prices are giving higher returns for farmers and more balance to the economy, said the Conference Board report, issued on Tuesday.

As well, the construction industry has not slowed down with large public mega-projects on-going and commercial and residential developments in Winnipeg remaining robust.

The Conference Board has consistently been the most optimistic of all the economic forecasters and its latest ranking for Manitoba is a full percentage point higher than the average all the other forecasts -- 2.7 per cent.

Narendra Budhia, manager of economic and fiscal analysis for the province, said the Manitoba economy is producing great results.

"It is happening despite the rising Canadian dollar, global competition, the trouble in the credit market, the struggling U.S. economy and labour shortages," he said.

Among other things, he noted that Manitoba is leading the nation for the second year in a row in capital investment intentions.

Whereas the Conference Board has Manitoba leading the country in 2008, the average of all the others has Manitoba fourth behind the three other western provinces.

The boom in Saskatchewan's economy is expected to continue, with growth of 3.6 per cent expected in 2008. As well as high commodity prices driving mining activity and boosting construction, new migrants are lifting the province's domestic economy, according to the report.

A five-year low in drilling activities is signalling a slowdown in Alberta, but the service sector will remain strong, and economic growth is expected to be 3.3 per cent in 2008.

The economic woes in the United States are expected to impinge on central Canadian growth and could result in more job losses in manufacturing. "In Central Canada, the sombre U.S. outlook will present a challenge for both Ontario and Quebec, but neither province is expected to slide into a recession," said Bernard.

However, the Conference Board report indicated that spending on capital projects coupled with income growth would allow for a 2.1-per-cent growth rate in Ontario in the coming year.

The U.S. downturn is also putting pressure on the B.C. forestry and manufacturing sectors. However, the Conference Board said the province's domestic economy remains robust enough to sustain 3.1 per cent growth in 2008.

martin.cash@freepress.mb.ca

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