OREANDA-NEWS. The Great Lakes-St. Lawrence 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 new report from BMO Economics. The report, Economic Challenges and Opportunities, was released today during a keynote address by BMO Chief Economist Doug Porter at the Council of the Great Lakes Region's Great Lakes Economic Forum in Toronto. The report also projects an optimistic economic outlook for the region.

"The region's expansion is expected to continue in 2016 as manufacturing and exports in Ontario and Quebec get a boost from a competitive currency and firm U.S. demand, while U.S. states in the region see an ongoing housing and consumer expansion tempered somewhat by the strong U.S. dollar," said Mr. Porter. Additionally, a lower-for-longer oil price environment should reduce costs through the manufacturing supply chain."

Mr. Porter remarked that sturdy growth of just under 2 per cent is expected for the region in 2016.

"The U.S. economy is expected to continue its expansion in the year ahead, growing at a roughly 2 per cent clip in 2016, down slightly from a 2.4 per cent pace last year. While Canada is expected to lag only slightly behind - which is an improvement after reporting last year the widest growth gap versus the U.S. in twenty years, the weakness north of the border is almost entirely concentrated in energy-producing provinces outside the Great Lakes region. Against that backdrop, the economic outlook on Canada's side of the Great Lakes region has improved, even as growth nationally remains sluggish. Ontario is seeing sturdy growth of more than 2.5 per cent, topping the national average for the first time in more than a decade."

Mr. Porter did note some longer-term challenges for the region: "Labour costs are in focus as the factory sector seeks to remain competitive, while productivity growth has slowed; demographic headwinds are blowing; and policymakers are working to keep finances in order, as well as facilitating cross-border trade flows."