Province's GDP growth beats most

April 28, 2009
Winnipeg Free Press
Written by: Martin Cash

Manitoba had the country's second-strongest economy in 2008, growing by 2.4 per cent, Statistics Canada reports.

In its first presentation of the gross domestic product numbers for the complete year, the StatsCan report confirms that Manitoba's growth rate was better than the national rate for the third year in a row.

Most indications are the province will continue that trend for a fourth year since the average of forecasts for 2009 has Manitoba doing much better than the country this year.

Jim Hrichishen, the province's director of economic and fiscal analysis, said the forecasts put Manitoba in second place among the provinces in 2009 for the third year in row.

"Second place is not bad," he said.

Robert Kavcic, an economist with BMO Capital Markets, said the Manitoba economy's diversity is like a mutual fund compared to owning just one or two stocks.

"For one thing, Manitoba has no exposure to the auto sector," he said. "The province has a toe in a little of every sector, which helps absorb weaknesses when you are in a recession."

BMO forecasts a decline in the provincial economy of 1.4 per cent in 2009 compared to a 2.5 per cent fall nationally.

Hrichishen said he takes some solace in that the BMO forecasts -- which are now revised on a weekly basis -- are the most pessimistic of all the forecasts.

He said the average of the forecasts as of late last week called for a 0.2 per cent slide in the Manitoba economy in 2009.

Melanie O'Gorman, an economist at the University of Winnipeg said she would be surprised if the economy shrank as much as BMO is predicting.

She said job losses occur near the end of slowdowns and there have only been minimal unemployment increases in Manitoba relative to other provinces.

martin.cash@freepress.mb.ca