2015 Manitoba Economy

What will the future bring?  I looked into my crystal ball, but it was clear as mud. Lately the media has been full of negative news about our economy due to falling oil prices and the weakening Canadian dollar. For entrepreneurs, this information is sure to have them worrying about the impact on their businesses. I don’t think it had anything to do with the luck of the Irish when Paul Ferley, Assistant Chief Economist of RBC, delivered some positive news at a breakfast presentation on March 17.

As expected, there are parts of the Canadian economy and regions that will be negatively impacted by the low oil prices (especially Alberta, Saskatchewan and Newfoundland) and our falling dollar. Manitoba though will remain fairly stable (as usual), and in fact may feel some positive economic impacts:

  • Manitoba’s export markets – A rise in US demand and the weakening Canadian dollar should increase our exports. This will help increase our real GDP to 2.8% in 2015 from an estimated 1.8% in 2014.
  • Strength in manufacturing activity – There should be a rise in core provincial exports due to higher demand, particularly from the US, and lower energy costs.
  • More employment in Manitoba – Job creation picked up during the second half of 2014, and this may continue in 2015. While the unemployment rate rose to 6.0% in January 2015 from 5.4% in December 2014, this was likely due to an increase in the size of the employment force, which is a sign of confidence in the labour market.
  • Lower gas prices – This will leave more money in consumers’ hands to spend in the economy or to pay down debt.
  • Low interest rates – Although Canadians are carrying historically high levels of personal debt, their debt service ratios remain relatively low due to low interest rates. Consumers are encouraged to take advantage of savings from lower gas prices to pay down personal debt. Should interest rates rise, they will be in a much better personal financial position.

I went to the breakfast with some trepidation about the economic situation in our province. Although my crystal ball remains murky, I do feel more optimistic about our provincial economy and the potential positive benefits to Manitoba entrepreneurs.

If you would like to learn more, RBC’s March 2015 Provincial Outlookprovides details on these highlights.

– Heather Stephens