Hay bales lie in a farmer's field north of Winnipeg August 31, 2012.
Credits: Brian Donogh/Winnipeg Sun/QMI AGENCY
RBC believes the rebound in the province's agricultural sector will be the driving factor behind a 3.3% growth in the province's economy in 2012, far better than the 1.3% growth last year.
"Following two years of adverse weather conditions and significant declines in agricultural production, recent estimates indicate that Manitoba is finally seeing some impressive gains in wheat and canola production," said Craig Wright, RBC's chief economist, in a press release.
Helping Manitoba's agricultural sector are droughts in the U.S., which have resulted in weaker harvests and driven up the prices for most crops, said Wright.
RBC anticipates these higher prices, along with the recovery in grain and oilseed production here at home, will significantly increase farm income and, in turn, boost both consumer and capital spending in Manitoba.
For 2013, RBC projects the economy will grow a further 3.2%, thanks to an improving manufacturing industry.