• A steep third pandemic wave will likely weigh on near-term growth.
  • Key pharmaceutical and aerospace exports have gotten off to slow starts this year, but agricultural prospects are more promising.

At the time of writing, Manitoba holds Canada’s highest per-capita COVID-19 caseload; however, the impact on growth thus far appears have been limited relative to the experience of other provinces. In May, Manitoba was the only province in which full-time employment was above its pre-pandemic level—despite imposition of new restrictions to combat the third wave—and retail and auto sales growth have outpaced the national average as of March. However, Manitoba’s total hours worked—closely linked to overall economic growth—have not kept pace with the national average to date this year.

Shipments of pharmaceutical products—Manitoba’s primary export by value in each of the last three years—have fallen off to begin 2021, offsetting gains in other categories. Softness in recent months may relate to Canada’s export ban on select prescription medicines—implemented last November to prevent shortages—though the sector had begun to witness declines by September.

Aerospace—another key export industry—continue to grapple with muted travel activity. So long as restrictions are in place, the sector faces challenges, though Manitoba shipments have trended generally higher with rising traveller numbers and an accelerating pace of US expansion.

Agricultural sector profits and export values look poised to gain from continued strength in prices and output. Market values of wheat, canola, and soybeans—Manitoba’s signature crops—are at or near decade highs, the latter supported by voracious Chinese demand for feed as it continues to rebuild its hog herd. A potential wrinkle is presented by early reports of droughts across key growing regions, and many farmers have also reported rising costs, as in other parts of the country. The food processing industry continues to benefit from elevated prices, and the Roquette pea processing plant in Portage la Prairie—the world’s largest—is on track to reach its full production capacity by early 2022.

Through April 2021, Manitoba was one of five provinces in which immigration was above year-earlier levels. However, the rate of newcomer admissions across Canada was still well below pre-pandemic and target levels. Like Saskatchewan, Manitoba had been in the midst of significant population outflows to other provinces before COVID-19 arrived in Canada. Also like Saskatchewan, immigrants in Manitoba’s labour market have traditionally maintained high employment rates relative to newcomers in other provinces, which highlights their important economic contribution.

As across the rest of the country, Manitoba plans to use infrastructure spending to bolster its recovery. The $2.1 bn earmarked for FY22 amounts to just under 3% of nominal GDP (according to the province’s own economic forecast), which ranks in the top half of provincial plans announced for that fiscal year. Read our 2021 Manitoba budget commentary here.


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