MonTREAL The head of the National Bank of Canada says the world shouldnt underestimate the resilience of the U.S. entrepreneurial culture and its ability to propel an economic recovery that will benefit Canadas manufacturing sector.

Louis Vachon said in a luncheon speech Thursday that most of the products that have spurred big lifestyle changes over the last decade or two have been developed by Americans. He points to Apple, Google and Twitter.

Consequently, he says the short- and long-term outlook is positive with moderate economic growth.

Meanwhile, Vachon said the U.S. banking system has strongly recapitalized and the housing market has stabilized and is improving.

Further gains in the second half of the year should support the Quebec and Canadian economies, wher most of the countrys manufacturing sector is based.

Vachon said he was not worried about the recent slowdown in the Canadian housing market brought on, in part, by tighter lending rules pushed by the federal government.

Instead, the key to growth is investing to expand manufacturing production, he said.

And while emerging countries are replacing the United States as the engine of global economic growth, he said the large development projects that rely on these countries, including Quebecs Plan Nord, will face intense volatility.