Based on the fact that Manitoba’s unemployment rate, currently 4.9%, is 40% lower than the national average (8.4%), it is clear that the province has, to date, only been sideswiped by the recession that hit the rest of country head-on.

A number of factors appear to have helped insulate Manitoba from the global meltdown.

First, although the sharp drop in U.S./global demand has caused Canada’s exports to plummet by 22.7% year-to-date, Manitoba’s foreign sales are down by a much smaller 10.8%. This is due in large part to the relative strength of the province’s manufacturing sector, where sales during the first four months of the year are off by only -3.9% compared to -16.4% for the country as a whole.

A second factor that has helped to insulate the Manitoba economy is the sustained growth of non-residential investment. During 2008, it increased by a very healthy 16.7% and, based on the value of building permits issued year-to-date (April 2009), it is up by 22.9%, more than twice the 11.1% increase for the country as a whole. Institutional building (+63%) and commercial building intentions (+24.7%) have been major contributors to the strength of total building permits year-to-date.

Sales of existing homes have steadily strengthened over the past three months, spurred by solid growth of net international migration through 2008 plus the effects of moderate job growth and historically low interest rates. This has caused average house prices to increase by 3.2% compared to a 4.7% drop
nationally.

Looking forward, given that Manitoba has not contracted as sharply as the rest of the country, its expansion will also be more muted. However, given the very positive outlook for the province’s green hydroelectric generating industry, Manitoba’s medium-term prospects are second to none.

Gross Domestic Product (GDP) Growth – Manitoba vs Canada

Data source (actuals): Statistics Canada/Forecasts and chart: Reed Construction Data – CanaData.