CHARLOTTETOWN, PRINCE EDWARD ISLAND--(Marketwired - Oct. 6, 2016) - Trade and tourism are supporting Prince Edward Island's economic growth, while knowledge-based and tech companies become increasingly important, 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 national and provincial business conditions provided to BMO's commercial bankers by local businesspeople.
The report notes that exports are up 7 per cent year-over-year in the 12 months through July, led by gains in farm, fish and food products, and transportation equipment. The weaker Canadian dollar has brought many Americans to the province, as well as Canadians, who are visiting P.E.I. instead of other countries. However, falling public-sector spending is likely to remain a drag on growth in the year ahead.
"Real GDP growth is expected to moderate slightly to 1.0 per cent this year," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Sturdy U.S. economic growth and the lagged impact of a weaker Canadian dollar should continue to help offset ongoing public-sector restraint. Trade and tourism should be a positive for the province through 2017."
"P.E.I. continues to benefit from a significant level of economic diversification," said Lynda Taylor, Senior Vice President, Atlantic Provinces Division, BMO Bank of Montreal. "With each passing year, growing knowledge-based and high-tech companies in sectors such as pharmaceuticals, chemicals, information technology and - in particular - aerospace, is becoming increasingly central to PEI's economic success."
Additionally, the report discusses that population growth has slowed in the province, down to half the rate seen at the height in 2010-11, to 0.8 per cent year-over-year. The labour market remains challenged, with employment falling 2 per cent year-over-year through August.
Ms. Taylor added BMO is here to help 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, BMO Financial Group is a highly diversified financial services provider based in North America. With total assets of $692 billion as of July 31, 2016, and over 45,000 employees, BMO provides a broad range of retail 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.