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Province coasting along well: think-tank

By: Murray McNeill

Posted: 02/5/2010 1:00 AM | Comments: 0 (including replies)

THE Canada West Foundation has a message for Manitobans who think the province's balanced economy is too boring: Bland is beautiful!

In its latest Manitoba economic profile and forecast, the Calgary-based think-tank's senior economist predicts Manitoba will post economic growth of only 0.1 per cent for 2009 and 1.9 per cent for this year.

While that might not sound like much, Jacques Marcil said most provinces would love to be in Manitoba's position because they all saw their economies shrink in recession-plagued 2009.

"Although Manitobans should be happy about this, many think that the balanced moniker has been used too often in the past when describing the province's economy," he said. "According to them, it makes Manitoba come across as bland and boring.

"(But) it is in times like these that Manitobans should remember that there is a benefit attached to having an unspectacular economy, with its moderate ups and downs. After all, who would argue against the case for getting rich at a slower pace and keeping your job, when the alternative is getting rich fast but occasionally facing sudden job losses?"

Although international exports plunged by 18 per cent and manufacturing shipments by 11 per cent, Manitoba still finished the year with a net gain in jobs and the second-lowest unemployment rate in the country, at 5.2 per cent.

"Meanwhile, the rest of the country was doing far worse," he said.

The foundation's prediction of 0.1 per cent growth for 2009 -- Statistics Canada isn't expected to issue the official numbers until next November -- is one of the more optimistic forecasts for last year.

Joseph Warbanski, a senior statistician with the Manitoba Bureau of Statistics, said the consensus forecast from the nine forecasters tracked by the provincial Finance Department was for a contraction of 0.2 per cent in 2009. The most pessimistic was Scotia Bank, which predicted a decline of 0.8 per cent, while the most optimistic was the Conference Board of Canada, which predicted growth of 0.5 per cent.

Last week, CIBC World Markets predicted 2.3 per cent growth for Manitoba this year, which would be sixth-best among the provinces. Marcil said the main reason Manitoba won't experience as big a rebound as some provinces is because it had a smaller decline in 2009.

He said the timid recovery in the United States and the strength of the Canadian dollar will both hurt Manitoba's export sales.

Marcil said most of the economic gain this year could come from a pickup in residential construction. Housing starts are expected to jump by 20 per cent to just under 5,000 units.

murray.mcneill@freepress.mb.ca

Here's what the Canada West Foundation says about the Manitoba economy:

-- Manitoba will be the only province to post economic growth in 2009, with a projected 0.1 per cent.

-- It will be one of the weaker performers in 2010, with projected real gross domestic product growth of 1.9 per cent.

-- The housing sector will help lead the charge in 2010, with a projected 20-per cent increase in starts and a three per cent increase in sales of existing homes. Selling prices will also continue to rise.

-- The manufacturing sector was hurt last year by the high-flying Canadian dollar and the severe economic woes in the United States, but is expected to stage a quick turnaround in 2010.

-- Net international migration has more than tripled over the last decade and was expected to hit 13,000 people in 2009.

-- Last year was Manitoba's 16th consecutive year of increased job creation, with growth of 0.3 per cent.

-- The province is expected to post its first retail spending decline in nearly two decades in 2009, after seeing sales fall by 2.4 per cent over the first nine months of the year.

-- It also recorded its lowest annual inflation rate in at least 30 years in 2009, at 0.8 per cent.

Republished from the Winnipeg Free Press print edition February 5, 2010 B4

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