While slow, Manitoba's economic growth still positive: RBC



    Capital spending and industrial diversification buoy activity

    TORONTO, June 15 /CNW/ - Despite the downward pressure of the global
recession, Manitoba's economy is expected to grow this year, albeit only by
0.5 per cent, according to the latest provincial forecast released today by
RBC.
    "While Manitoba's growth will significantly slow, the province continues
to benefit from economic drivers that offset weaker elements," said Craig
Wright, senior vice-president and chief economist, RBC. "We forecast positive
U.S. growth in the second half of this year, which should provide a boost for
Manitoba's manufacturing sector, further raising real GDP growth to 2.8 per
cent in 2010."
    According to the report, the main impact of the worldwide recession on
the province's economy has been the shutdown of large primary metal
operations, prompted by the drop in global base metal demand. This has weighed
on both manufacturing activity and the labour market. Manufacturing shipments
fell an annualized 4.9 per cent in the first quarter of 2009 and provincial
unemployment rate rose to 4.9 per cent in May from an average last year of 4.1
per cent.
    Manitoba's deterioration in these sectors is much less pronounced
compared to the national numbers, where manufacturing shipments have plummeted
17 per cent - largely reflective of the auto crisis - and the unemployment
rate has gone from an average last year of 6.2 per cent to 8.4 per cent in
recent months.
    "Manitoba's resilience against the recession largely reflects continuing
strong capital expenditures, as well as greater strength in manufacturing
industries outside of primary metals, including a surge in machinery
production and healthy bus production," added Wright.
    RBC notes that growth in Manitoba is expected to get support from the
$1.6 billion in infrastructure spending for fiscal year 2010, announced in the
provincial government's 2009 budget. The agricultural sector is also expected
to benefit from strengthening grain prices; this outlook is tempered, however,
by concerns about damage caused to agricultural areas by the major flooding
this spring.
    The main theme of the RBC Provincial Outlook is that tremendous weakness
late last year and early this year has prompted a downward revision to real
GDP growth forecasts across the board for 2009. Recent developments lend
support to RBC's view that a general recovery will be established by the
second half of 2009 and sustained in 2010. In 2009, expectations are that the
economies of only three provinces - Saskatchewan, Manitoba and Nova Scotia -
will grow, while all other provincial economies will contract. Ontario (deep
troubles in the auto sector) and Newfoundland and Labrador (sharp drop in
mineral and oil production) are taking the biggest hits, with Alberta
(cutbacks in business and residential investment) being the other province
showing above-average decline in activity. However, RBC continues to project
that growth will return to all provinces next year.
    The RBC Economics Provincial Outlook assesses the provinces according to
economic growth, employment growth, unemployment rates, retail sales and
housing starts.
    According to the report (available online as of 8 a.m. EDT today, at
www.rbc.com/economics/market/pdf/provfcst.pdf), provincial forecast details
are as follows:

    
                      Real GDP         Housing starts         Retail sales

                   Y/Y % Change          Thousands            Y/Y % Change
                08     09     10      08     09     10      08     09     10
                --     --     --      --     --     --      --     --     --

    N.& L.    -0.1   -3.5    3.0     3.2    3.2    3.0     7.6    0.1    4.8

    P.E.I      0.9   -1.8    2.0     0.7    0.5    0.7     5.6   -1.3    4.1

    N.S.       2.0    0.2    2.5     4.3    3.2    3.5     4.2   -2.8    4.5

    N.B.       0.0   -0.5    2.7     4.2    3.5    3.5     5.9   -2.2    4.1

    QUE.       1.0   -1.6    2.3    47.9   38.9   37.0     5.1   -1.5    4.5

    ONT.      -0.4   -3.4    2.2    75.6   52.7   65.0     3.5   -3.0    4.2

    MAN.       2.4    0.5    2.8     5.6    3.9    5.3     7.2   -2.6    5.4

    SASK.      4.4    0.7    2.8     6.8    3.3    3.7    10.6   -1.9    5.8

    ALTA.     -0.2   -2.5    2.9    29.0   16.7   28.0    -0.1   -7.8    5.7

    B.C.      -0.3   -1.9    2.9    34.3   14.7   23.0     0.3   -6.5    5.9

    CANADA     0.4   -2.4    2.5     211    141    173     3.4   -3.7    4.8


                    Employment        Unemployment rate

                   Y/Y % Change               %
                08     09     10      08     09     10
                --     --     --      --     --     --

    N.& L.     1.5   -2.6    1.1    13.2   14.7   14.8

    P.E.I      1.3   -2.3    1.0    10.7   12.5   12.6

    N.S.       1.2   -0.4    1.0     7.7    9.3    9.6

    N.B.       0.9   -0.5    0.6     8.6    9.5   10.3

    QUE.       0.8   -1.0    1.1     7.2    8.8    9.4

    ONT.       1.4   -2.6    1.0     6.5    9.3    9.9

    MAN.       1.7   -0.1    1.3     4.1    5.1    5.6

    SASK.      2.2    1.5    1.2     4.1    5.2    5.7

    ALTA.      2.7   -1.0    1.4     3.6    6.4    6.7

    B.C.       2.1   -2.5    2.1     4.6    7.8    7.8

    CANADA     1.5   -1.7    1.3     6.1    8.5    9.0
    





For further information:

For further information: Craig Wright, RBC Economics, (416) 974-7457;
Paul Ferley, RBC Economics, (416) 974-7231; Stephanie Lu, RBC Media Relations,
(416) 974-5506


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