BMO Financial Group
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BMO Financial Group

May 08, 2013 08:00 ET

BMO Blue Book: British Columbia Growth to Outpace Canada's by 2014 as U.S. Demand Picks Up

- Major housing markets in correction mode, while forestry industry set to drive export growth as U.S. housing market continues to strengthen

- GDP growth of 1.7 per cent expected in 2013, 2.5 per cent in 2014; Canada GDP growth expected to be 1.6 per cent in 2013, 2.3 per cent in 2014

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 8, 2013) - B.C. growth will likely hold steady this year at 1.7 per cent and reach 2.5 per cent in 2014, according to 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 expertise of BMO's economists with information on current business conditions provided to BMO's commercial bankers by local businesspeople.

"Among the headwinds are a slowing domestic housing market and softer Asian export demand, though a resurgent U.S. housing market plus firmer momentum in China will likely support exports later in the year," said Robert Kavcic, Senior Economist, BMO Capital Markets.

Mr. Kavcic noted that housing market is in correction mode, particularly in Vancouver and Victoria where buyers now have more control. "Looking ahead, a strengthening U.S. housing market should lift U.S. economic growth above 3 per cent by the second half of the year, supporting exports, while growth should begin an upward trend. Adding to the optimism is that British Columbia's forestry exports were up 11 per cent year-over-year in February."

B.C. businesses are showing caution in this environment, but some sectors are looking positive, according to Dean Kirkham, Vice President, Commercial Banking, Greater Vancouver, BMO Bank of Montreal. "Our agricultural clients represent a stand-out industry - particularly in the supply-managed areas of poultry, dairy and eggs. On the natural resources side, we're seeing positive signs in the forestry industry. With U.S. housing starts trending up, we are hearing from our clients that they are securing more demand from south of the border. This is a positive sign for many Western Canadian suppliers. We're looking for an improvement in demand from emerging markets to boost the BC commodities markets."

Mr. Kirkham added that BMO is armed with a highly-skilled team of experts that can make lending decisions at the local level to help its commercial clients boost productivity, expand into new markets and make strategic investment decisions that will help propel growth and drive success.

The full BMO Blue Book can be downloaded at www.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 $542 billion as at January 31, 2013, and more than 46,000 employees, BMO Financial Group provides a broad range of personal and commercial banking, wealth management and investment banking products and solutions.

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