BMO Financial Group

BMO Financial Group
BMO Bank of Montreal

BMO Bank of Montreal

October 06, 2016 06:00 ET

BMO Blue Book: Quebec's Economy Growing at Steady Pace and Set to Benefit From U.S. Demand and Improved Business Confidence

- Real GDP will likely grow 1.4 per cent this year, up from 1.1 per cent in 2015

- Export momentum is picking up and the stabilized fiscal landscape is supportive of business investment

- The jobless rate has fallen to 7 per cent, the lowest level in just over a decade, but demographic headwinds will keep trend growth below the national average

MONTREAL, QUEBEC--(Marketwired - Oct. 6, 2016) - U.S. demand and improved business confidence are expected to promote steady growth in Quebec's economy, according to the BMO Blue Book released today by BMO Capital Markets Economics and BMO Commercial Banking. Quebec's real GDP will likely grow 1.4 per cent this year, up from 1.1 per cent in 2015, but demographic headwinds will keep its trend growth below the national average in the coming years.

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.

"Export momentum is picking up, with net export volumes improving in four straight quarters through 2016Q1," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Net exports will benefit from stronger sales to the U.S. and the pass-through of past weakness in the Canadian dollar."

Mr. Kavcic added, "The Province of Quebec is projecting a second-straight balanced budget in FY16/17, and is set to loosen the purse strings somewhat after a period of stiff restraint."

The fiscal landscape stabilization is set to support investment. "With the continued strengthening of the economy in Central Canada, Quebec's businesses are getting the opportunity to expand their operations," said Mario Rigante, Senior Vice President, Quebec Division, BMO Bank of Montreal. "We are seeing improved strength in transport, manufacturing and professional services - particularly in Montreal. In other regions, we are helping our customers with the challenges caused by lower commodity prices, particularly in areas that rely on resource industries such as mining."

The report also notes that Quebec's jobless rate has fallen to 7 per cent, the lowest level in just over a decade. However, demographic headwinds continue to weigh on Quebec's economy, keeping trend growth below the national average in the year ahead. Population growth is down to a 0.6 per cent year-over-year pace in recent quarters, below Ontario at 1 per cent and Western Canada at 1.3 per cent.

Momentum in the housing market has improved considerably. Sales across the province were up 6 per cent year-over-year in the first eight months of the year and housing starts are steady around the $40k annualized mark.

Mr. Rigante 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

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.

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