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Economic Outlook

Winnipeg’s real gross domestic product (GDP) came in at an estimated 2.8 per cent in 2006 and is expected to moderate very slightly to 2.6 per cent in 2007.  Retail sales increased by 5.9 per cent in 2006, an impressive result, given that retail sales already averaged a very high 6.7 per cent growth per year from 2001 to 2005.  Manufacturing output is expect to rebound in 2007, growing by 2.4 per cent and to continue to improve over the medium term, averaging 2.7 per cent per year between 2008 and 2011.  Wholesale and retail trade output is forecast to rebound and grow 3 per cent in 2007.  In 2006 both residential and non-residentail activity contributed to the construction output increasing by more than 6 per cent.  Total output growth in the construction sector reached an amazing 17.5 per cent.  Non-residential activity is expected to maintain its strength in 2007.  Higher land costs, home prices and interest rates will all contribute to fewer starts, as builders are expected to break ground on 2,600 units in 2007, a 6.9 per cent decrease.  The total construction output is forecast to rise by 5.5 per cent in 2007, then to average around 3.2 per cent growth per year from 2008 to 2011, inclusively.

The Conference Board of Canada projects Winnipeg’s GDP in 2007 to accumulate $22.6 billion (1997$) worth of goods and services.  The unemployment rate is expected to come in at 4.5 per cent.

Continued population growth will support medium-term economic activity, as real GDP and employment are forecast to average 2.7 per cent and 1.2 per cent growth per year, respectively from 2008 to 2011.

Manufacturing Shipments

Manitoba manufacturing shipments rose 10.4% in 2004 to $12.6 billion, ahead of the national increase of 8.4%. This was a significant improvement from 2003, when a number of factors, including weak market conditions in the U.S. and strong increases in the value of the Canadian currency relative to the U.S. dollar, combined to limit Manitoba’s shipments growth to just 1.3%.

Manitoba’s manufacturing industries growth was led by the largest sector, food processing. Food shipments increased by 18.8%, or $461 million. Shipments of wood products increased by 19%, fabricated metals by 18% and machinery by 14.3%. Declines were led by a 12.7% fall in electrical equipment shipments (the fourth annual decline in this manufacturing category) and a 2.1% reduction in other non-durables.

Source: The 2005 Manitoba Budget Papers