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Slow, steady and succeeding

Manitoba's unsexy economy is delivering results

By: Martin Cash

Posted: 07/19/2012 1:00 AM | Comments: 0

We don't always listen when economists and demographic experts suggest this is a new Manitoba.

But we should.

Economic diversification, modest population growth, increasing real estate prices, low unemployment and half-decent savings rate have started to pay off in Manitoba.

"This is not the old Manitoba that we remember with slow economic growth, slow population growth, lots of old people and young people leaving," said Wilf Falk, the province's chief statistician. "That's not the paradigm any more."

For the past 10 years there has been solid economic growth, actual population growth and rising income -- all evidence things have changed in Manitoba.

This week, Environics Analytics made the technical case to show, in fact, Manitobans experienced more wealth creation last year at 2.34 per cent than any other province in the country and far more than the national average of -0.04 per cent.

And while Manitobans rank only sixth wealthiest in Canada with an average net worth of $270,639 -- significantly below the national average of $363,292 -- we've been comers for a few years now.

Peter Miron, senior research associate with Environics Analytics, said, "Manitoba has been coming off about 10 years of very strong, above-average performance."

Breaking out numbers for the 16 largest cities, Winnipeg was behind only Regina with an average household-net worth increase of 3.07 per cent. And Winnipeg was fourth lowest when it came to average household debt.

Miron said when things are going well or poorly in Saskatchewan, Alberta, B.C., Ontario and Quebec, you generally know the reason why.

"The problem with Manitoba is that it has everything," Miron said. "It's very much the average of the country. But it's working now and hopefully it will continue to work."

Real estate makes up 58 per cent of Canadians' wealth and since real estate prices have had a solid run-up in both Winnipeg and the province for several years, it should not be a surprise that our net wealth is growing.

Michael Holden, senior economist with the Canada West Foundation, said the Calgary-based think tank recently produced some research that showed housing prices have gone up 56 per cent in Manitoba since 2006.

"Consider that from December 2010 to December 2011 values were up 12.6 per cent in Manitoba, but they were down in British Columbia, flat in Alberta and up only seven per cent in Saskatchewan," Holden said.

There was plenty of catching up to do in Manitoba, but the economy is showing the emerging strengths are sustainable.

"It seems like the fundamentals are fairly sound," said Narendra Budhia, director of economics and fiscal analysis with the province's Department of Finance.

For instance, the unemployment rate has hovered at around 5.4 per cent for the past two years and sunk a little lower this year.

"The labour supply is matching the labour demand, despite the fact we've seen the sharpest increase in immigration and population growth in 40 years," Budhia said.

Manitoba is a small economy that's so diversified, its experience during the 2009-10 recession was one of the most benign in the western world.

So while the manufacturing sector has shown some declines like the rest of the country, the service sector has strengthened.

Agriculture, while no longer one of the most important economic drivers in the province, has had a couple of poor years, but with a little luck might jump even 20 per cent this year.

This economy really does work.

It may even be ahead of the game. For instance, Canada has long been trying to wean itself off its reliance on the handy U.S. market. In the past 10 years, Manitoba has doubled the national rate when it comes to Asian exports as a percentage of total exports -- 22.5 per cent in Manitoba compared to 10.8 per cent in Canada.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition July 19, 2012 B3

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About Martin Cash

Martin Cash joined the Free Press in 1987 as the paper’s business columnist.

He has spent two decades chronicling the city’s business affairs.

Martin won a citation of merit from the National Newspaper Awards in 2001 for his coverage of the strike and subsequent multi-million-dollar union settlement at the Versatile tractor plant. He has also received honours and awards for his work on agriculture and technology development in Manitoba.

Martin has written a coffee-table book about the commercial and industrial make-up of the city, called Winnipeg: A Prairie Portrait.

Martin Cash on Twitter: @martycash

martin.cash@freepress.mb.ca

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