HALIFAX, NOVA SCOTIA--(Marketwire - May 23, 2012) - After a stable performance during the economic downturn that helped support slightly above-average growth of 2 per cent over the past decade, Atlantic Canada will now face a period of economic growth below the Canadian average according to a special report from BMO Economics released today entitled Atlantic Canada: Challenges and Opportunities.
"With the broad Canadian economy now in expansion mode, Atlantic Canada has begun to lag and real GDP will struggle to grow 2 per cent annually through 2012, trailing the 2.3 per cent national average," said Robert Kavcic, Economist, BMO Capital Markets. "While there are certainly growth opportunities in the region, namely the $25 billion Federal shipbuilding contract in Nova Scotia, challenges such as fiscal consolidation, skilled labour availability and a weak productivity record will persist over the medium-term horizon," added Mr. Kavcic.
Mr. Kavcic also noted that skilled labour could become scarcity, a consequence of the Royal Canadian Navy shipbuilding contract - which will create some 8,000 new jobs - and the soaring offshore oil production in Newfoundland & Labrador.
"If the looming demand for skilled labour is not effectively met, growth prospects could suffer," added Kevin Lynch, BMO Vice Chair and a leading organizer of the 4Front Atlantic Conference that will be bring together 200 business and academic leaders from Atlantic Canada on May 25 in Halifax.
Mr. Lynch noted that Atlantic Canada also has the most challenging demographics of any region of Canada, and its trade concentrated in countries and regions that are not beneficiaries of the global economic gravity shift. "To be at the forefront of change and success, we must focus on identifying areas and regions of opportunity that are aligned with our region's core strengths, leverage our competitive advantages, develop new markets, create an Atlantic Canada brand and enhance the value-added of the products and services we sell abroad," added Mr. Lynch. He invited Atlantic Canadians to listen in to the second instalment of this annual conference that will be available via webcast at www.4frontatlantic.com.
The BMO special report provides an economic outlook for 2012 and 2013 as well as an overview of the fiscal situation of each province in Atlantic Canada. Highlights of the BMO report include:
- Nova Scotia leading the region with 1.8 per cent growth in 2012 and Newfoundland & Labrador expected to lead in 2013 with 3.5 per cent growth.
- Employment growing fastest in Newfoundland & Labrador in 2012 with a growth rate of 1.6 per cent in 2012 and Nova Scotia expected to lead at 1.6 per cent in 2013.
- Nova Scotia featuring the lowest unemployment rate in 2012 and 2013 at 8.5 and 8.2 per cent, with Newfoundland & Labrador posting the highest rate in 2012 and 2013 at 12.8 per cent and 12.5 per cent.
- Nova Scotia leading in housing starts in 2012 and 2013, with a growth rate of 4.4 per cent and 4.9 per cent.
- Consumer prices rising most in Newfoundland & Labrador in 2012, at 2.3 per cent, and in Nova Scotia in 2013, at 2.2 per cent.
The complete report can be found 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 $538 billion as at January 31, 2012, and more than 47,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.