The Great Lakes-St. Lawrence economy is poised to accelerate in 2017 after posting sturdy growth in recent years, according to a new report from BMO Economics. The report, Driving North American Growth and Trade, was released this week during a keynote address by BMO Chief Economist Doug Porter at the the Council of the Great Lakes Region’s third Great Lakes Economic Forum in Detroit.
“The Great Lakes-St. Lawrence region is a vital driver of North American economic output, jobs and exports,” said Mr. Porter. “With economic output estimated at US$6 trillion in 2016, the region accounts for 30 per cent of combined Canadian and U.S. economic activity and employment.”
Mr. Porter noted that the U.S. economy is expected to accelerate this year, growing at a 2.3 per cent clip in 2017, up from a 1.6 per cent pace last year. Meanwhile, Canada is expected to outperform slightly after lagging in recent years; its economy is expected to grow 2.5 per cent as Central Canada remains strong, while the oil-producing provinces emerge from recession. Ontario is seeing sturdy growth around the 2.6 per cent mark, topping the national average on a sustained basis for the first time in more than a decade, while Quebec is piercing through the 2 per cent threshold—both mark well above-potential economic growth.
Mr. Porter stated that trade within the Great Lakes region is relatively balanced, with Ontario and Quebec running a modest surplus with the U.S. states. “The North American Free Trade Agreement has certainly helped to spur the trade relationship in the region, and recent policy rhetoric is concerning given how integrated the supply chain has become. Measures by policymakers to maintain the trade relationship and further facilitate the flow of goods in the region would be a clear positive for economies on both sides of the border.”
Mr. Porter also observed that the region’s highly diverse economy drives employment across a wide range of manufacturing and service industries. “While manufacturing employment is down 15 per cent from pre-recession levels, education & healthcare (+21 per cent) and professional services (+16 per cent) have helped make up the shortfall. In fact, education, healthcare and professional services alone have added 2.5 million jobs over the last 10 years, dwarfing the near-1 million manufacturing job losses.”
The full report can be downloaded at BMO Economics.