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Bank predicts good year for Manitoba economy

Published by Steve Coleman on October 12, 2011

BMO is predicting a good year for Manitoba, despite a second-straight year of Assiniboine River flooding.

BMO Capital Markets Economics is predicting two per cent real GDP growth for the province this year because of good years for the resource sector and manufacturing.

"Manufacturing continues to perform well with shipments up 8.1 per cent year-over-year through July," said Robert Kavcic, Economist, BMO Capital Markets, in a release. "Energy and mining activity should also maintain their momentum if commodity prices can hold up, after real oil and gas production jumped 14 per cent in 2010."

Predictions say that cleaning up after this spring's Assiniboine River flood will cost $200 million and could keep crop yields at last year's anaemic levels. Barring more major flooding next year, normal harvests could raise Manitoba's growth to 2.1 per cent for 2012.

The good news helped spur other benefits for the province, Kavcic said. Rather than the NHL's Winnipeg Jets bringing economic good fortune to the city, the current boom may have helped bring professional hockey back to the city.

The relatively-good times have helped Manitoba's liquidity, too, the bank says.

Manitoba's Public Accounts reported a $298 million deficit in fiscal 2010-2011 (0.6 per cent of GDP), $169 million lower than the $467 million estimated in this year's budget. The numbers are a sign of higher-than-estimated revenues and lower expenses.

"Deficits will continue for another two years - $345 million in fiscal 2012-2013 and $146 million in fiscal 2013-2014 - before a $185 million surplus is projected for fiscal 2014-2015," Kavcic said.

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