BMO Financial Group
TSX : BMO
NYSE : BMO

BMO Financial Group

July 01, 2011 09:00 ET

BMO: O Canada! Businesses, Investors and Homeowners are Feeling Good, eh

Canadians express sense of optimism about economy

- Majority of small business owners investing in their businesses

- Two-thirds of Canadians confident in their ability to save for retirement

- Over half optimistic about Canada's housing market

TORONTO, ONTARIO--(Marketwire - July 1, 2011) - It's Canada's 144th birthday and BMO Financial Group tells Canadians that there is indeed cause for celebration, as Canucks are feeling upbeat and confident about the economy.

"Despite ongoing uncertainty in the world economy, Canada remains relatively strong and has been able to successfully shift from recovery to a more mature expansion phase," said Douglas Porter, Deputy Chief Economist, BMO Capital Markets. However, Mr. Porter does point out that Canadians still face some challenges, such as household debt continuing to outstrip income growth.

According to a variety of recent studies conducted by BMO Financial Group, Canadians are clearly showing signs of optimism and confidence in matters of business, investing, and housing.(1)

Small businesses:

  • 76 per cent of small business owners are currently investing in their businesses
  • 91 per cent of franchise owners believe their businesses will grow or remain the same in the coming year

"It is very encouraging to see that Canadian small business owners are willing to take advantage of the market opportunities, and are investing in growing their businesses. Many have focused on upgrading their business processes, equipment and people, and this will go a long way towards improving the country's lagging productivity levels," said Gail Cocker, Senior Vice President, Commercial Banking, BMO Bank of Montreal.

"The appreciation in the Canadian dollar has also provided additional purchasing power for businesses looking to import equipment or purchase supplies from the global marketplace, and while many have adapted to this current business reality, for others, particularly in Canada's diverse manufacturing sector exporting is more challenging."

Investing:

  • 66 per cent of Canadians are confident in their ability to save for retirement
  • Almost 80 per cent of high net worth Canadians are more optimistic or feel the same about the financial markets compared to prior to the onset of the 2008 recession

"The growing optimism we are seeing among Canadian investors speaks to their confidence in being able to forge ahead and continue to take the steps needed to fulfill their investment goals," said Serge Pépin, Head of Investments, BMO Investments Inc.

Mr. Pépin recommends that Canadians seek out the assistance of a financial professional when it comes to planning for retirement. He also suggests that Canadians ensure that their investment portfolios are well diversified in order to balance risk.

Housing:

  • 61 per cent of Canadians are confident current housing values will hold steady into the future

"The country's real estate market has been remarkably resilient. As long as consumers continue to push demand, which remains the case, we see ongoing strength in the housing market across the country." said Laura Parsons, Mortgage Specialist, BMO Bank of Montreal.

Ms. Parsons counsels Canadians to consider a shorter amortization period in order to become mortgage free faster. She also states that stress testing your budget using a mortgage payment based on a higher rate can help avoid nasty surprises in the future should interest rates rise.

(1) Studies referenced are from Leger Marketing and Harris/Decima and were conducted between November 2010 and June 2011

Contact Information