TORONTO, ONTARIO--(Marketwired - May 7, 2014) - Over the next two years, the Canadian economy is expected to grow at a moderate pace as we face a weakened Canadian dollar and revived U.S. economy, according to the latest edition of the BMO Blue Book.
The BMO Blue Book is published 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. The BMO Blue Book features a report for Canada, each province and the Greater Toronto Area.
"After the challenging North American winter, our commercial clients are setting their sights high and more than half of business owners we surveyed expect that 2014 will be a better year," said Steve Murphy, Head, Canadian Commercial Banking, BMO Bank of Montreal. "The weakened loonie and uptick in the U.S. economy have presented an opportunity for businesses to make strategic investment decisions that can help to propel growth in the near term."
Robert Kavcic, Senior Economist, BMO Capital Markets, noted that the Canadian economy continues to grow and is expected to come in at 2.3 per cent this year before rising to 2.5 per cent in 2015. "The stronger U.S. economy and weaker loonie remain key elements shaping economies across the country. The economic climate still varies by province and region, with Alberta outperforming the rest of Canada by a large margin, due in part to sturdy oil prices and a heavy dose of public-sector capital spending providing a boost."
Regionally, according to the BMO Blue Book:
- Alberta's economy is expected to grow by 3.5 per cent this year, well above the 2.3 per cent national rate; Alberta is the only province carrying 3-handle growth
- British Columbia is expected to perform closer to the national average, with the housing market remaining balanced after enduring a soft patch
- Saskatchewan's labour market remains healthy with the lowest jobless rate in Canada (4.5 per cent)
- In Manitoba's, real GDP is expected to remain in line with the national average at 2.2 per cent. A diverse and stable economy remains one of Manitoba's key economic strengths.
- Ontario's economy expected to improve by 2.2. per cent this year, up from the 1.3 per cent average pace seen over the two years prior
- Quebec's economy anticipated to benefit from stronger U.S. demand and a less aggressive focus on balancing the budget
- Overall, this region stands to benefit the most from a weaker Canadian dollar and a rebound in growth south of the border
- Nova Scotia is poised to lead Atlantic provinces in growth, picking up to 2.1 per cent in 2015 as work begins on the Federal shipbuilding contract
- New Brunswick expected to benefit from increased capital spending into 2015 while the trade and tourism sectors in PEI will see a boost from a lower loonie and strengthened U.S. demand
- Newfoundland & Labrador's lowest average jobless rate in more than a decade will support better trends in housing and consumer spending in the near term
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 financial services organization based in North America. The bank offers a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers. BMO Financial Group had total assets of $593 billion and more than 45,500 employees at January 31, 2014.