BMO Financial Group
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BMO Financial Group

May 08, 2013 08:00 ET

BMO Blue Book: Newfoundland & Labrador Economy Set to Bounce Back, Lead Country

- GDP growth of 5.0 per cent expected in 2013, 1.8 per cent in 2014; Canada GDP growth expected to be 1.6 per cent in 2013, 2.3 per cent in 2014

- Ramped up investment in the oil sector to lead growth

ST. JOHN'S, NEWFOUNDLAND AND LABRADOR--(Marketwired - May 8, 2013) - Newfoundland & Labrador's economy is poised to bounce back after temporary factors tripped up growth last year, and the province's businesses are feeling positive, 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.

"Maintenance shutdowns in the offshore oil sector cut back growth in 2012, but higher output, plus ramped up investment in the sector, should lift growth by 5 per cent - the fastest pace in Canada," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Other underlying economic trends in the province are solid. The jobless rate sits near a record, helped by 3.0 per cent year-over-year job growth. Average weekly earnings growth is also strong, up 4.4 per cent year-over-year in January, supporting personal incomes and consumer spending."

Mr. Kavcic added that retailers have enjoyed some of the strongest growth trends in Canada over the past year, trailing only Saskatchewan and Alberta.

"The recurring theme for Newfoundland & Labrador is consistent strength," said Jim Fallon, District Vice-President, Newfoundland & Labrador, BMO Bank of Montreal. "Our commercial banking customers are feeling positive, and major projects that have the long-term potential to drive economic growth are either moving along or coming closer to fruition."

Mr. Fallon also noted that projects like Muskrat Falls and Hebron are leading to actual contracts for work, particularly on the non-residential construction side. Further, he added that BMO has been working with Aboriginal governments to support significant development in Labrador.

"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," added Mr. Fallon.

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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