FREDERICTON, NEW BRUNSWICK--(Marketwired - Oct. 30, 2013) - Real GDP in New Brunswick is expected to grow 0.8 per cent this year after declining in 2012 and should pick up at a 1.4 per cent pace in 2014 with the help of higher exports, according to the Provincial Monitor report released today by BMO Economics.
"The worst of New Brunswick's capital spending downturn appears to be behind the province," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Looking ahead, potash output at the Sussex mine is expected to ramp up in 2014, barring pricing uncertainty in the wake of the spat between major producers in Russia and Belarus. Meanwhile, stronger U.S. growth, particularly in the housing sector, should also help drive firmer exports into 2014."
While energy exports continue to struggle this year, the forestry sector has seen an increase in shipments and should further benefit from the turnaround in the U.S. market. Nova Scotia's massive shipbuilding contract could also see some benefits spill over into the province.
Employment levels were unchanged from year-ago levels in the third quarter. The jobless rate sat at 10.7 per cent in September, and is near the highest in Canada behind only PEI, at 11.0 per cent. This is a major reason behind a significant outflow of migrants from the province, which totaled more than 3,000 people in the year through the second quarter of 2013.
"While our business clients in New Brunswick have been working to control costs they are also looking for business opportunities beyond provincial borders in order to weather this period of slow growth in the province," said Allison Hakomaki, Vice-President of Commercial Banking for Atlantic Canada at BMO Bank of Montreal. "With better prospects for the year ahead, it's more likely businesses will proceed with the investments that they've been holding off on."
The full Provincial Monitor 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 $549 billion as at July 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.