MACKINAC ISLAND, MICHIGAN--(Marketwired - May 31, 2013) - The Great Lakes region is a vital driver of North American economic output, employment and trade, accounting for nearly a third of combined Canadian and U.S. output, jobs and exports, according to a report on the region from BMO Economics. While the region was hit hard during the Great Recession, economic activity has since turned around and is now shifting into a higher gear.
The report was released as this weekend's Council of Great Lakes Governors 2013 Leadership Summit began in Mackinac Island, Michigan.
"The Great Lakes Region is a major driver of the North American economy," said Doug Porter, Chief Economist, BMO Capital Markets. "With economic output of US$4.7 trillion in 2011, the region accounts for 28 per cent of combined Canadian and U.S. economic activity. It would rank as the fourth largest economy in the world if it were a country, behind only the U.S., China and Japan."
Mr. Porter stated that the region has bounced back after the recession - helped especially by the resurgent auto sector. "North American car and truck production is back to pre-recession levels, global demand for machinery and equipment has firmed and the service sector remains sturdy."
"We are encouraged to see leaders gather for this year's summit working to accelerate the momentum generated by the Great Lakes economy," said Lyle McCoy, Managing Director, Head of Public Finance and Infrastructure Banking, BMO Capital Markets, who is attendiong the summit. "We're confident that our region's governments will make the necessary infrastructure investments to ensure the Great Lakes Region remains North America's economic powerhouse."
Mr. Porter agreed, noting the important role of governments in the region in ensuring economic momentum continues. "Measures by policymakers to improve trade flows and to foster overall growth in the region are key for the long-term health of the broader economy."
The report states:
Employment
- The region's highly diverse economy supports employment across a wide range of manufacturing and service industries.
- While manufacturing employment is down about 25 per cent from levels seen a decade ago, education & healthcare (+23 per cent) and professional services (+12 per cent) have helped make up the shortfall. In fact, education & healthcare now make up nearly 18 per cent of employment, while retail & wholesale trade, government and professional services also carry double-digit weights.
Trade
- The region's states were the origin of 24 per cent of total U.S. merchandise exports in 2012, while Ontario accounted for a hefty 38 per cent of Canadian shipments.
- The North American Free Trade Agreement has certainly helped to grease the trade relationship in the region, but more can be done to enable the efficient movement of goods, especially given how integrated the supply chain has become.
- The Beyond the Border Action Plan is one positive, carried out jointly by the U.S. and Canadian governments to combat post-9/11 border thickening and to improve trade flows. Among the measures are increased value thresholds for expedited customs clearance, preclearance initiatives for commercial cargo and improved border infrastructure.
The complete report can be downloaded at www.bmocm.com/economics .
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $555 billion as at April 30, 2013, and more than 46,000 employees, BMO Financial Group provides a broad range of personal and commercial banking, wealth management and investment banking products and solutions.
