Fall COVID-19 surge in Manitoba expected to delay economic recovery until 2022

After claiming dozens of Manitoban lives, the fall surge of COVID-19 cases is nowexpected to hammer the provincial economy hard enough to delay a recovery until 2022.

The Conference Board of Canada expects Manitoba's economic growth and employment to lag behind Canada as a whole next year, mainly because of the immense rise in COVID-19 cases this fall and the ensuing restrictions put in place to attempt to slow the spread of the disease.

"Given the recent spike in COVID-19 cases in the province, we expect Manitoba's recovery to full economic health to be delayed until 2022," the board says in a provincial economic outlook slated for publication next week.

"Manitoba coped well during Canada's first COVID-19 wave earlier this year, reporting far fewer cases than many other provinces. But it has not been able to evade the second wave of the pandemic."

Manitoba has Canada's highest rate of new COVID-19 infections. In recent weeks, hundreds of new cases have been announced daily in a province of just under 1.4 million people.

As a result, the Conference Board expects Manitoba's real gross domestic productto fall by 6.2per cent this year, which isbetter than the 6.6-per-cent contraction expectedfor Canada as a whole. In 2021, Manitoba's economy is expected to grow by 3.5per cent, more than two points belowthe national rebound of 5.6per cent.

The jobs picture is not much better. Employment in Manitoba is expectedto fall by 3.2per cent this year, which is farbetter than the national 5.4-per-cent drop.In 2021, employment in Manitoba is forecast to grow by 3.6per cent,below a national increase of 4.9per cent.

"Having recovered most of the jobs that were lost due to pandemic-related factors, the province is now facing challenging months ahead with the resurgence of cases and the resulting increase in restrictions," the board says in its report.

The Conference Board says Manitoba's economy outperformed Canada overall this year in employment and sales, though housing starts were below national average.

It expects Manitoba's manufacturing sector to decline by 9.6per cent this year, mainly because of a reduced demand for aerospace and transportation equipment during the pandemic.

The Conference Boardexpects the transportation and warehousingsector to dropby 15.9per cent this year and only recover slightly in 2021.

More stability in the finance, insurance and real-estate sectors will, however, provide the province with some stability next year, the report projects.

Manitoba's Progressive Conservative governmentis more optimistic than the Conference Board.

"While the economic impact of the pandemic has been difficult for all provinces, Manitoba's economy is performing better than most and is among the top performers in employment levels, unemployment rate, retail sales, manufacturing sales, merchandise exports, and residential and non-residential investment," Finance Minister Scott Fieldingsaid in a statement.

Fielding's office said a survey of economic forecasts suggests the provincial economy could decline anywhere from 3.1 to 6.3 per cent this year.

It's expecting 4.2-per-cent growth in2021, based on an average of nine forecasts.

"We have maintained a cautious approach to our provincial GDP forecast through the pandemic and acknowledged significant risks remain that could fundamentally change the outlook," Fielding said.