CHICAGO, IL--(Marketwired - Apr 25, 2014) -
- BMO Economics Special Report on Great Lakes region says economic activity will bounce back in 2014
- GDP growth on par with national average last year, but will pick up the pace in 2014 and 2015
The Minnesota economy will continue to grow at a modest pace supported by solid labor market performance, according to a special report released today by BMO Economics on the economic output from the Great Lakes region.
The report, North America's Economic Engine, was released to coincide with the Council of Great Lakes Governors meeting, taking place in Chicago on April 25-26, 2014. The reports notes that the region is a major driver of North American economic output, employment and trade, accounting for nearly a third of combined Canadian and U.S. output, jobs and exports.
"The Great Lakes region has so much going for itself with transportation infrastructure, advanced manufacturing, research and development, digital manufacturing, strong locally-rooted financial institutions, and some of the world's best post-secondary institutions," said Ambassador David Jacobson, Vice-Chair, BMO Financial Group. "The discussions over the next two days in Chicago will allow us to explore opportunities to create jobs, strengthen trade, open doors to new discoveries, and drive innovation and prosperity for all in the region."
In Minnesota, real GDP grew 1.7 percent in 2013, close to the national average. Growth is expected to pick up at a 2.9 percent pace this year and inch slightly higher to three percent in 2015.
The state has a relatively healthy labor market, with 1.6 percent year-over-year payroll growth in March. The jobless rate -- already among the lowest in the U.S.at 4.8 percent -- is projected to reach 4.1 percent in 2015.
"Nonfarm payrolls have pushed to a record high in recent months, an impressive recovery from the recession and one that has outperformed most other Midwest states," said Michael Gregory, Head of U.S. Economics, BMO Capital Markets. "Recent gains in Minnesota have been seen across the spectrum of service-sector industries, including transportation, finance, professional services and leisure and hospitality."
The housing market is recovering in Minnesota; home prices across the state are up a healthy 5.3 percent year-over-year in the fourth quarter of 2013, according to the FHFA (Federal Housing Finance Agency) index. According to the S&P Case-Shiller Index, Minneapolis prices rose 9.4 percent year-over-year in January -- not as strong as the some of the double-digit gains seen in some other major cities, but the state had not experienced the same downturn. The state-wide foreclosure rate sits below-average at 1.2 percent, and vacancies are low.
The report also notes that exports levelled off last year as machinery shipments softened, but momentum picked up to a 5.9 percent year-over-year pace by the fourth quarter.
To view a full copy of the report, visit www.bmocm.com/economics.
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