HALIFAX, NOVA SCOTIA--(Marketwired - May 29, 2013) - Economic growth remains sluggish in Atlantic Canada and is expected to underperform the national average again this year, according to a special report from BMO Economics released today entitled Atlantic Canada: Assessing the Challenges and Opportunities.
The BMO report notes that real GDP in Atlantic Canada grew at just a 0.1% annualized rate in the five years through 2012 versus 1.1% for all of Canada.
In 2013, the report expects growth of 5.0% in Newfoundland & Labrador, driven by a rebound in oil production, 1.5% in Prince Edward Island, 1.4% in Nova Scotia and 0.9% in New Brunswick.
Atlantic Canada will continue to benefit from large scale capital projects, including the Hebron offshore oil project, the Muskrat Falls hydro project and the Royal Canadian Navy's plans to spend $25 billion on shipbuilding in Halifax through 2030, helping to create some 8,000 new jobs. "Overall, private sector capital spending is expected to rise 4% this year after jumping more than 8% in 2012, with the vast majority of the strength in Newfoundland & Labrador," said BMO economist Robert Kavcic who authored the special report.
Mr. Kavcic also noted that skilled labour scarcity remains a key issue for the region, as skilled labour continues to migrate to Western Canada. "Net out-migration from Atlantic Canada totalled more than 10,000 people in the four quarters through 2012Q3, closing in on peak levels seen at the height of Alberta's energy boom in 2006," added Mr. Kavcic.
The BMO special report indicated that Atlantic Canada's productivity record has been relatively strong over the past decade by Canadian standards, but has trailed off in recent years. Output per hour rose at a 0.7% annualized pace in the last 10 years, matching the national trend.
"Atlantic Canada needs to deal, and deal well, with both fiscal austerity and economic renewal to improve competitiveness and seize the opportunities inherent in the changing global economy," said Kevin Lynch, BMO Vice Chair and a leading organizer of the 4Front Atlantic Conference that will bring together 275 business and academic leaders from Atlantic Canada on May 30 in Halifax.
"Improving productivity and innovation, focusing on immigration and talent development, and building the capacity to trade in non-traditional markets are all parts of the recipe for success today and tomorrow," added Mr. Lynch.
The complete BMO report is available at www.bmocm.com/economics .
About BMO Financial Group
BMO Bank of Montreal operates 85 branches in Atlantic Canada. BMO Financial Group also serves clients in Atlantic Canada through 15 BMO Nesbitt Burns branches and three BMO Harris Private Banking offices.
