Manufacturing Growing at a Modest Pace With Exports Continuing to Rebound - BMO Economics

- Unemployment Below National Average

- Thailand Floods Impact Auto Production

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Nov 17, 2011, 02:00 ET

INDIANAPOLIS, Nov. 17, 2011 /PRNewswire/ -- Indiana manufacturing is growing at a modest pace, having slowed after a post-recession recovery, while exports rebound, according to the State Monitor report released today by BMO Capital Markets Economics.

Exports continue to perform well, up 11 percent year-over-year in the third quarter. Transportation equipment exports have grown in the past year. However, flooding in Thailand has again disrupted the auto sector supply chain, and Toyota temporarily suspended production in Indiana in late October.

"Our business customers continue to express optimism in the strength and resiliency of Indiana's economy," said Tim Massey, Indiana Regional President, M&I, a part of BMO Financial Group. "We stand ready to assist as businesses look to invest in upgrading their businesses and retool for future growth."

Nonfarm payrolls were 0.4 percent below year-ago levels in the third quarter, underperforming the national average. Manufacturing employment has seen modest growth in the past year, while trade and transportation have been weak. Despite recent job losses, the unemployment rate remains slightly below the national average at 8.9 percent.

"The employment picture has faltered after a brief post-recession recovery," said Robert Kavcic, Economist, BMO Capital Markets. "State and local governments have shed jobs amid an unfavourable budget situation. State revenues, however, have bounced back smartly in recent quarters, led by personal income and state tax receipts, so that should stem the losses."

The housing market remains soft, with sales and prices both below year-ago levels, though prices have fallen a relatively modest 6.2 percent from peak levels. On the commercial side, the industrial availability rate in Indianapolis was a relatively low 10.9 percent in the second quarter of 2011, but office vacancy rate was a still high 21.8 percent.

The full State Monitor report can be downloaded at bmocm.com/economics.

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 $477 billion as of July 31, 2011, and more than 47,00 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and solutions.

SOURCE BMO Financial Group