CHARLOTTETOWN, PRINCE EDWARD ISLAND--(Marketwired - Oct. 30, 2013) - The Prince Edward Island economy continues to grow at a moderate pace, with real GDP expected to expand 1.4 per cent this year, according to the Provincial Monitor report, released today by BMO Economics.
"Growth is expected to accelerate to a 1.6 per cent pace in 2014, helped by firmer U.S. economic growth and less drag in the public sector," said Robert Kavcic, Senior Economist, BMO Capital Markets.
Public-sector capital spending is expected to rebound after sliding 26 per cent in 2012 - PEI's latest five-year capital plan calls for a net $60.3 million in fiscal 2013-2014. "Capital spending in the public administration sector is expected to jump 35 per cent this year following the fiscal restraint that led to cutbacks last year," noted Mr. Kavcic.
In exports, momentum has picked up in recent months; this follows a weak start to the year with U.S. demand still soft, the Canadian dollar elevated and aerospace shipments backing off from strong 2012 levels.
PEI's jobless rate continues to drift down, sitting at 11 per cent in September - just a few ticks above New Brunswick as the highest in Canada. Meantime, population growth has slowed significantly in the past year amid more normal immigration trends and continued out-migration to other provinces.
"Our business clients are cautiously optimistic about the year ahead and continue to look at controlling costs and gaining efficiencies during this period of moderate growth," said Allison Hakomaki, Vice-President of Commercial Banking for Atlantic Canada at BMO Bank of Montreal.
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.