Global Corporate Xpansion

2011, where growth will be moderate at just over 2 percent.

We will see a recovery in the manufacturing sector as the United States gets back on its feet. Also Manitoba has several mineral mines and has benefitted from the recovery of base metal prices that have been rising. Some mines will reopen and new mines will be developed.

What is holding back growth is the construction sector, which had been growing strongly since 2006. There was an expansion of a pipeline that crossed through the province that came to an end in 2009. This was a large investment project that will not be replaced by another large project so that will hold back construction in 2010, as well as overall economic growth in the province.

The outlook for Saskatchewan is quite different. It suffered considerable GDP decline in 2009, mainly because of the slowdown in the mining sector, in particular with the potash industry.

Saskatchewan exports most of its potash on global markets, and demand in 2009 virtually came to a halt. Several of the companies that operate the potash mines scaled back production significantly, which really hurt the province. There were also layoffs and less transportation fulfilling activity.

Toward the end of 2009 and in early 2010 we have seen demand come back as new contracts were signed. The industry is gradually coming back, though it won’t fully recover in one year. However, it will be enough to push overall economic activity over 3 percent for 2010. And a similar number is expected in 2011.

Interview conducted by Rachel Duran.

Marie-Christine Bernard is the associate director, provincial forecast, for the Conference Board of Canada. She can be reached by e-mailing bernard@conferenceboard.ca. The Conference Board aims to be recognized as Canada’s most influential, independent source of insights for leaders. It builds leadership capacity for a better Canada by creating and sharing insights on economic trends, public policy and organizational performance. Visit the organization at www.conferenceboard.ca.

GCX: What are the economic trends you are watching that would interest businesses?

Bernard: There has been mention that interest rates are low and that they will need to go up because if they stay at the low level it will create inflation down the road. People are watching to see when the Bank of Canada will increase interest rates. There is a June date that is being talked about. The question is whether the bank will increase the rates during a six-month period or during a one-year period. One thing to watch is monetary conditions over this next year and how they will influence the Canada dollar.