Missouri Economic Growth Moderating
- Housing prices stabilizing
- Drought affects agriculture sector
- Flat payroll trends persists
ST. LOUIS, Nov. 13, 2012 /PRNewswire/ -- Missouri GDP is on pace to grow 1.3 percent this year and should pick up in 2013 if crop conditions and job growth improve, according to the State Monitor Report released today by BMO Capital Markets Economics.
Payrolls have been relatively flat overall over the past two years. The jobless rate, however, was a below-average 6.9 percent in August, down 1.6 points from the same month last year as the participation rate has fallen sharply. In particular, education, healthcare and professional services are all seeing strong year-over-year job growth. However, the government sector has been consistently shedding payrolls for the past two years, and construction employment is depressed, near the lowest level since 1993.
"While some businesses are hesitant to expand yet, we are seeing more and more customers expanding and investigating opportunities to grow as we see the economy ease up," said Dave Warning, Executive Vice President, Commercial Banking for BMO Harris Bank. "With our local expertise, sector knowledge and mid-market focus we stand ready to help them find solutions as they invest and upgrade their businesses."
The Missouri housing market fared much better during the housing bubble than most other parts of the country, and as such, the downturn has been less onerous. The foreclosure rate, while elevated by historical norms, remains low by comparative standards at just 2 percent in the second quarter, leaving little in the way of excess supply. In St. Louis, for example, there is less than a 4 months' supply on the existing market. Overall, Missouri's housing market has begun to see prices stabilize about 10 percent below peak levels.
"The worst drought in about half a century crippled the agriculture sector this year. In fact, during the April-June period, Kansas City saw the driest three-month period since 1911," said Dr. Sherry Cooper, Chief Economist, BMO Financial Group. "As a result, real output in the sector will be down for a third straight year. Farm income expectations have wilted, and sharply higher feedstock prices have lifted forced liquidations and cut into livestock profits."
Manufacturing shows promise as Ford is investing $1 billion to expand its assembly plant in Kansas City and GM is upgrading its Wentzville plant, near St. Louis, to produce midsize pickup trucks.
The full State Monitor report can be downloaded at www.bmocm.com/economics.
About BMO Harris Bank
Based in Chicago, BMO Harris Bank N.A. provides a broad range of personal banking products and solutions through over 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. Deposit and loan products and services provided by BMO Harris Bank N.A. Member FDIC. BMO Harris BankSM is a trade name used by BMO Harris Bank N.A. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with 1,600 branches, and a retail deposit base of approximately $180 billion
SOURCE BMO Harris Bank