Harris Private Bank Market Outlook: U.S. Manufacturing Rebounds

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May 03, 2012, 02:00 ET

CHICAGO and TORONTO, May 3, 2012 /PRNewswire/ -- In his most recent market update, Harris Private Bank's Jack Ablin comments on the rebound taking place in U.S. manufacturing. Based on The Institute of Supply Management's factory index, the rebound in manufacturing helped push the Dow up more than 100 points and factory employment has hit a 10-month high.

According to Mr. Ablin, the three factors helping propel U.S. manufacturing are as follows:

Favorable labor costs - With wages in the manufacturing industry having flat lined for the past ten years, the cost of American factory workers are at least 20 percent cheaper in real terms compared to 2002

Attractive currency levels - The U.S. dollar has been off about 35 percent on a trade weighted basis since 2009, creating another reason to hire American workers

Cheap natural gas - Due to the improvement in drilling technology, abundant supplies of domestic natural gas give the U.S an enormous cost advantage

"As the U.S. economy continues to turn the corner, the manufacturing sector is playing a key role in its recovery," said Jack Ablin, Executive Vice President and Chief Investment Officer, Harris Private Bank. "We expect this trend in manufacturing to continue, even in the face of moderating economic winds abroad."

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $538 billion as of January 31, 2012, and more than 47,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.

Harris Private Bank is a trade name used by various financial service providers of BMO Financial Corp. BMO and BMO Financial Group are trade names used by Bank of Montreal. The information and opinions expressed are based on sources believed to be reliable, but are not represented as complete. Opinions expressed are current as of the date of this release and are subject to change.

SOURCE BMO Financial Group