Small high-contact industry presence may prevent more severe economic hit from omicron wave. Manitoba’s economy and labour market are less concentrated towards retail and sectors related to tourism and accommodation than most other provinces (chart 1); that helped mitigate the size of the downturn during past lockdown periods.
More normal weather should help agricultural sector. The severe drought that hit the Prairies this summer hurt yields across the region and looks to have weighed on Manitoba crop receipts in Q3-2021; exports of crop products also fell late last year—likely affected by Port of Vancouver closures. Luckily, commodity price gains offset some of these losses. Even average growing conditions would translate into strong volume gains this year, though extreme weather events will likely become more common as climate change advances.
Other key industries should also eventually gain from more normal conditions. Aerospace output—stubbornly weak last year—will likely be held back by reductions in travel activity prompted by the omicron wave but experience a bounce-back later in 2022. We expect pharmaceutical product shipments to benefit from easing supply chain pressures as the year progresses.
Food manufacturing remains a strength for Manitoba. Sectoral shipments increased significantly last year—supported by elevated food price gains that we anticipate will continue through 2023—and the Roquette pea processing plant in Portage la Prairie—the world’s largest—remains on track to reach its full production capacity this year.
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