- New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland & Labrador have mixed economic landscapes
TORONTO, Oct. 30, 2017 /CNW/ - Atlantic Canada's provinces have diverse economic landscapes but overall are indicating modest growth across sectors, according to forecasts in the BMO Blue Book released today by BMO Capital Markets Economics and BMO Commercial Banking.
Much like the U.S. Federal Reserve's Beige Book, the BMO Blue Book combines the insights of BMO's economists with information on current national and provincial business conditions provided to BMO's commercial bankers by local businesspeople. The Blue Book features a report for Canada at large and each province.
Population growth has picked up, largely because of international inflows, easing the demographic headwind for the time being. Meanwhile, Nova Scotia is seeing a robust non-residential investment climate.
"Economic growth looks to improve in Nova Scotia this year, with real GDP expected to grow 1.6 per cent, up from a 0.9 per cent pace in 2016," said Robert Kavcic, Senior Economist, BMO Capital Markets. "While still sluggish from a national perspective, that would be tops in Atlantic Canada, and mark the best pace in seven years."
This year, real GDP is estimated to rise 1.5 per cent, slightly stronger than seen last year.
"While the growth is softer here versus the rest of the country, we're still seeing a great deal of opportunities for success, especially in the agriculture sector," said Justin Scully, RVP, Business Banking, Halifax, BMO Bank of Montreal. He added that further growth in the sector will depend on farmers' ability to harness new technology to boost output in their operations.
Further, after four years of outright decline in population growth, a jump in international immigration has resulted in a recent increase.
In Nova Scotia, the jobless rate in the province remains favourable in comparison to other Atlantic provinces.
Many construction projects are underway in Halifax, including the $25 billion contract to build combat ships for the Royal Canadian Navy at the Irving Shipyard.
"Construction projects – major and minor – in the province are engaging local business firms and supporting the corresponding growth and job development in Halifax and beyond," said Mr. Scully. "While the province's long-term business prosperity requires ongoing work, this is one example of where we're seeing benefits."
In the residential construction space, activity has picked up in response to firmer population growth, with the number of units under construction in Halifax at the highest level in 40 years – separate from the 3,500 condo units also under construction.
Prince Edward Island
PEI's economy continues to grow at a solid pace, with real GDP growth expected to come in at 1.7 per cent this year.
According to Mr. Scully, the story for Prince Edward Island businesses looks positive. With solid growth and a return to surplus in the provincial government's books, good economic conditions are being seen across the province.
Industries contributing to growth include exports and tourism. The fishery remains a major component of PEI's economy as well, with strong demand from domestic and international markets.
Population growth is holding at a 17 per cent year-over-year pace, with international immigration accelerating recently.
Newfoundland & Labrador
While the economic situation for Newfoundland & Labrador has been challenging recently, the current environment is starting to stabilize.
Despite the effects of declining oil and gas prices resulting in projects being scaled back across the province, existing oil fields have been able to maintain production.
Upcoming construction projects, such as the $3.2 billion West White Rose project, are expected to help offset those cut backs.
In the fishery, harvesters and producers have seen falls in exports as well as in crab and shrimp quotas. But they are hopeful the Atlantic Fisheries Fund, which is designed to help drive innovation in the industry, will set up businesses for success in worldwide markets.
Notwithstanding these challenges, the province of Newfoundland & Labrador has taken action with respect to difficult fiscal circumstances, focusing on both revenue and expenses to cut the budget deficit and stabilize the province's credit rating.
The full BMO Blue Book can be downloaded at: www.bmocm.com/economics.
About BMO Financial Group
Established in 1817, and currently marking its 200th year of operations, BMO Financial Group is a highly diversified financial services provider based in North America. With total assets of $709 billion as of July 31, 2017, and more than 45,000 employees, BMO provides a broad range of personal and business banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, Wealth Management and BMO Capital Markets.
SOURCE BMO Financial Group
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