ST. JOHN'S, NEWFOUNDLAND AND LABRADOR--(Marketwired - May 7, 2014) - Long-term prospects remain encouraging for the oil sector in Newfoundland and Labrador, 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.
Carolyn Booth, Senior Vice President, Atlantic Provinces Division, BMO Bank of Montreal, noted that 2013 was another banner year for Newfoundland & Labrador, with a strong economic performance across the province. "Improved economic conditions globally, particularly in the U.S., have increased demand in the fishery market. Further, the decline in the relative value of the Canadian dollar has made fisheries exports more attractive globally and BMO's customers who operate in this industry are poised to benefit."
"Investment in the oil & gas sector continues at a healthy pace, with construction of the Hebron project underway," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Other projects such as White Rose - currently in its engineering phase - and a major discovery by Statoil in the Flemish Pass Basin are expected to contribute the economy in a great way over the coming years."
Mr. Kavcic added that jobless rate sits at 11.6 per cent, coming in well below the average of the past decade, and wages are growing at an above-average pace. "This supports better trends in housing and consumer spending compared to the province's Atlantic counterparts - retail sales were up more than 3 per cent year-over-year in the first two months of 2014 - despite negative population growth."
"Many Newfoundlanders who gained experience in the energy industry have taken advantage of the opportunity to apply their skills back at home," said Allison Hakomaki, Regional Vice President, Commercial Banking, Atlantic Provinces Division, BMO Bank of Montreal. "The Muskrat-Falls hydroelectric project and the Hebron, Terra Nova, Hibernia and White Rose offshore energy projects continue to mature and provide high paying jobs and yield considerable economic spinoffs for the province. Statoil and Husky's Bay du Nord discovery northeast of St. John's is also an exciting energy development for the province."
Ms. Hakomaki noted 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 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.