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BMO Financial Group

February 16, 2012 06:00 ET

BMO Blue Book: Optimism High in Newfoundland & Labrador

ST. JOHN'S, NEWFOUNDLAND AND LABRADOR--(Marketwire - Feb. 16, 2012) - After public and private sector investment activity helped Newfoundland & Labrador lead the country with 3.8 per cent real GDP growth in 2011, optimism among the province's companies remains high, 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.

"Construction activity has been the biggest economic driver in the province since the recession," said Robert Kavcic, Economist, BMO Capital Markets. "Government infrastructure spending is on pace to total more than $1 billion in fiscal 2011-2012 - more than 3 per cent of GDP - helping boost overall capital spending an expected 27 per cent in calendar 2011. The private sector is also providing a lift, with projects like the Vale nickel processing plant, Hibernia South and Hebron adding to the level of public-sector investment this year."

"The mood among our customers in Newfoundland & Labrador is definitely more optimistic than it was just six months ago, mainly because key projects are further along in their development," said Jim Fallon, District Vice-President, Newfoundland & Labrador, BMO Bank of Montreal.

Mr. Fallon also noted that the province is becoming a key centre for innovation. "As the host for the Ocean Sciences Centre at Memorial University and a growing expertise on oil & gas, deep water drilling and deep water exploration, Newfoundland & Labrador now boasts some of the best ocean science expertise in the world."

The full BMO Blue Book can be downloaded at http://bmonesbittburns.com/economics/reports/20120216/bb201202.pdf.

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