BMO Financial Group

BMO Financial Group

October 09, 2012 11:30 ET

BMO Economics: Quebec Economy Standing Up to Headwinds

- Strong investment intentions in mining sector

- Jobless rate at 8.0 per cent in September, down from December high of 8.7 per cent

- Real GDP growth of 1.3 per cent in 2012, 1.4 per cent in 2013 (Canada's at 2.2 per cent in 2012, 2.0 per cent in 2013)

MONTREAL, QUEBEC--(Marketwire - Oct. 9, 2012) - Although growth has slowed given fiscal restraint and the external environment, investment in the resource sector will provide support to the Quebec economy, according to the Provincial Monitor report released today by BMO Economics. Real GDP is likely to grow 1.3 per cent this year and 1.4 per cent in 2013.

"The resource sector in the northern reaches of the province could see continued activity," said Robert Kavcic, Economist, BMO Capital Markets. "Investment intentions in mining point to 56 per cent growth in 2012, to $5 billion - a positive development for the Quebec economy."

Fiscal restraint is ongoing, with real per-capita program spending to contract slightly over the next 3 years. "Real government spending was up just 0.5 per cent year-over-year in the first half of 2012 as stimulus spending has all but faded, and is likely to remain weak until budget-balancing work is completed," noted Mr. Kavcic.

"Despite the challenging business environment, Quebec businesses continue to invest in their operations by purchasing machinery and equipment," said Mario Rigante, Vice President, Commercial Banking, Metropolitan Montreal, BMO Bank of Montreal. "When we look at small businesses across the province, our BMO Small Business Confidence Report shows 73 per cent of entrepreneurs are confident and the majority expects their business to grow next year."

Employment remains volatile in Quebec, and was up just 0.8 per cent year-over-year in September. Public-sector jobs are flat in the past year, reflecting fiscal restraint, while private-sector growth has cooled to a sub-1 per cent pace. "The jobless rate sat at 8.0 per cent from a recent high of 8.7 per cent in December," stated Mr. Kavcic. "Trade headwinds such as a strong Canadian dollar and slow growth in the U.S. are weighing on activity, including manufacturing which saw real output down 0.7 per cent year-over-year in May."

The full Provincial Monitor can be downloaded at

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 $542 billion as at July 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.

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