The U.S. economy will continue to grow throughout 2015, with real GDP forecast to grow at a pace of 3.1 percent, according to a new report from BMO Economics, a unit of BMO Harris Bank.
The report attributes the positive growth to several factors. Among them: reduced oil prices, as well as robust gains in consumer spending, the labor market, new housing starts and business investment.
“Consumer spending and housing look to lead economic growth this year, more than offsetting weakening net exports and ebbing business investment flows, particularly in the oil sector,” says Michael Gregory, head of U.S. Economics, BMO Capital Markets. “While wage trends continue to disappoint, for consumers and the economy as a whole, this is being more than offset by the sheer number of jobs being created.”
In the Midwest, Illinois is positioned to accelerate growth for the second straight year, with low oil prices, increased consumer spending and business investment driving the state forward.
“We’re here to help business owners and executives in the Midwest as they continue to invest in their businesses, spurring further growth,” said Dave Casper, Executive Vice President and Head, Commercial Banking, BMO Harris Bank. “While the Midwest growth forecast is slightly behind the national average, it’s important to note that the outlook is still positive, and that forecasted growth continues to trend in a positive direction.”
The report adds the auto sector is fueling growth in Indiana, while Wisconsin should also benefit from lower oil prices and firming factory activity. Minnesota’s diverse economy continues to perform well.
While growing conditions have been volatile in recent years, Kansas and Missouri are seeing improved output. These states are, however, also experiencing slightly below-average real GDP growth.
A full copy of the BMO report may be viewed here.