TORONTO, ONTARIO--(Marketwired - Oct. 6, 2016) - Canada's strong seven provinces are on pace to balance the effects of a disappointing year in Alberta, Saskatchewan and Newfoundland & Labrador, according to forecasts from the 2016 BMO Blue Book released today. However, those regions have weathered similar challenges before, and there is still reason for optimism outside B.C. and Central Canada.
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 national and provincial business conditions provided to BMO's commercial bankers by local businesspeople. The Blue Book features a report for Canada at large, each province and the Greater Toronto Area.
While areas with more diverse resource bases have accelerated in spite of major cutbacks in the energy sector, the business climate remains promising, especially within the agriculture, construction, innovation and tourism sectors across the country.
"While growth at the national level looks subdued but relatively undramatic, conditions at the provincial levels range from strong growth to outright recession," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Notable is the fact that regional economic growth drivers of the past decade have receded to the back of the pack, while past laggards move into a new leadership role."
Provincial forecasts at-a-glance according to the BMO Blue Book:
- British Columbia is projected to lead the pack again this year with 3.0% real GDP growth, more than twice national average.
- Real GDP in Alberta is expected to contract 2.3% this year, up from its 4.0% decline in 2015 though not expected to return to levels before the oil price shock in the near term.
- Saskatchewan's economy will see a modest improvement of 0.5%, despite feeling the impact of the oil and gas sector.
- Manitoba, boasting the most diverse and consistent economy in the nation, should expand 2.4%, consistent with the average of the past five years.
- Ontario real GDP growth is expected to grow 2.6%, with a slight, but still solid, decrease to a 2.3% pace in 2017.
- Growth in Quebec is expected to pick up to 1.4%, supported by new-found fiscal stability and a warming labour market.
- Nova Scotia is poised to lead the region at 1.1% growth this year, as work is underway on a number of major capital projects
- New Brunswick and PEI continue to face tough demographics, but the weak loonie is expected to provide a 0.5% and 1.0% boost, respectively
- Newfoundland & Labrador will likely see GDP contract 2.0% again this year as fiscal restraint remains heavy and some major investment projects reach completion.
Despite a challenging economic situation, overall, opportunities continue to grow for Canadian business owners.
"Even those whose businesses have been affected by oil and gas are embracing opportunities that a low dollar and equally low interest rates have presented," said Andrew Irvine, Head of Canadian Commercial Banking, BMO Bank of Montreal. "If we have one takeaway from our commercial clients nationwide, it's that those who have made a point in investing in their operations, in times like this, see increased productivity and impressive returns on their investments for years to come."
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.