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New voice cuts growth forecast

But province seen near top

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A second leading forecaster has scaled back its economic-growth forecast for Manitoba for this year, but this one is also predicting it will lead the country in growth in 2015.

In its latest quarterly Provincial Outlook report released on Thursday, the Conference Board of Canada predicts the Manitoba economy will grow by only 1.8 per cent this year instead of the two per cent it forecast in its previous quarterly report released in December.

But it also predicts it will follow that up with a robust three per cent real gross domestic product (GDP) growth in 2015, which it says will be better than any other province, including resource-rich Alberta.

The new Conference Board forecast comes just one day after RBC Economics also lowered its 2014 growth forecast for Manitoba, saying it now expects the provincial economy to expand by two per cent this year, not the 2.3 per cent it was forecasting in December.

The Conference Board said a number of key industries are expected to contribute to 2015's anticipated surge in economic growth.

"Next year, stellar growth in metal mining and mineral fuel output, as well as a pickup in construction activity, will provide the basis for the stronger growth in real GDP," it said.

It noted a number of new mines will be ramping up production over the next two years. They include San Gold's Rice Lake gold mine, Carlisle's Farley gold mine, HudBay Minerals' Lalor zinc, copper and gold mine and the Reed copper mine, which is a joint venture between HudBay and VMS Ventures.

"This will result in exceptional 17.7 per cent growth in metal mining in 2015," it said.

Mineral-fuels output will be another bright spot, the board predicted, with growth of 6.6 per cent this year and 9.6 per cent in 2015.

After somewhat subdued growth this year, the province's construction industry is also expected to accelerate to 3.1 per cent growth in 2015.

The board predicted provincial manufacturers will also post steady gains in the next two years, as local aerospace firms benefit from a steady increase in passenger demand within the commercial airline market, and Winnipeg's New Flyer Industries reaps the benefits of a substantial increase in new transit-bus orders.

The board also predicted the Manitoba economy will generate 16,620 new jobs over the next two years. The strong job growth, combined with decent income gains, improving consumer confidence and low borrowing costs, "will encourage Manitobans to spend," it said. And that should boost retail sales by 2.8 per cent this year and a further 3.7 per cent in 2015, it added.

RBC said Wednesday it was lowering its growth forecast for this year because manufacturing output and employment growth were weaker than expected in 2013. That, coupled with cutbacks in capital spending, will mean slightly slower economic growth this year than was first thought.

But on the bright side, "We expect increased demand from south of the border to boost manufacturing activity and ultimately growth in Manitoba this year," said Craig Wright, RBC's senior vice-president and chief economist. "In 2015, we'll see manufacturing conditions improve further in the province, with activity in the sector growing at a stronger clip of 4.0 per cent."

RBC is predicting real GDP growth in Manitoba will accelerate to 2.7 per cent in 2015.

murray.mcneill@freepress.mb.ca

Republished from the Winnipeg Free Press print edition March 21, 2014 B6

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Updated on Friday, March 21, 2014 at 7:20 AM CDT: Adds table

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