The Great Lakes region is a major driver of North American economic output, employment and trade, accounting for nearly a third of combined Canadian and U.S. output, jobs and exports, says a report by BMO Economics.
“The Great Lakes region has so much going for itself with transportation infrastructure, advanced manufacturing, research and development, digital manufacturing, strong locally-rooted financial institutions, and some of the world’s best post-secondary institutions,” says former American ambassador to Canada David Jacobson, who is now vice-chair, BMO Financial Group.
Economic activity across the eight states and Ontario has improved after being hard hit during the recession, the report says, and it’s forecasted to continue growing through 2014. Economic output was $4.9 trillion in 2012, and the region accounts for 28% of combined Canadian and U.S. economy activity.
“If the region were a country, it would rank as the fourth-largest economy in the world, behind only the U.S., China and Japan,” says Michael Gregory, Head of U.S. Economics, BMO Capital Markets.
The region employed more than 46 million workers in 2013, accounting for nearly 30% of the combined Canadian and U.S. workforce, in a wide range of industries.
“Historically, this has been a hub for manufacturing, but employment has diversified and factory-sector employment now makes up just over 10% of the workforce across the region—down five percentage points from a decade ago,” says Gregory. “We’ve seen double-digit job growth in education and healthcare, as well as professional services, with retail and wholesale trade and government services also making a strong contribution to employment.”
The report also notes the importance of trade within the region and across borders. Nearly a quarter of U.S. merchandise exports came from the region in 2013, while Ontario accounted for 40% of Canadian shipments. The main drivers were transportation equipment and machinery, followed by agricultural and food products, metals and chemicals.
Trade between the Great Lakes states, and cross-border trade, is vital to the smooth running of this economic engine. The North American Free Trade Agreement has played a pivotal role, as has the Beyond the Border Action Plan. Policy aimed at improving trade flows will further support growth in the region,” says Gregory. “The bridge between Windsor and Detroit is just one recent example we’ve seen, which will not only improve border infrastructure but serve to facilitate increased trade.”
The report was released to coincide with the Council of Great Lakes Governors meeting, taking place in Chicago April 25 to 26.