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HALIFAX, June 25, 2009 – While the Nova Scotia economy has fared relatively well during this downturn thanks to robust non-residential construction activity, weak manufacturing and export sectors will pull down real GDP by 0.9 per cent this year, according to the Provincial Outlook report from BMO Capital Markets Economics. The economy is projected to rebound in 2010, with expected growth of 1.5 per cent.

“Construction of EnCana's $700 million Deep Panuke offshore natural gas project headlines a strong lineup of projects underway,” according to Robert Kavcic, Economist, BMO Capital Markets. “Indeed, Nova Scotia is one of only two provinces expected to see higher capital spending this year, with non-housing expenditures likely to jump 6.8 per cent—the biggest increase since 2002.”

However, manufacturing remains under water, with shipments down 17 per cent year-over-year through April and employment in the sector down a harsh 15 per cent year-over-year in May. “This has helped push the unemployment rate above 9 per cent—while the slackening of Nova Scotia's labour market has been tame relative to most parts of the country, it will still weigh on domestic demand,” said Kavcic.

The provincial budget, tabled in May, was defeated by the provincial legislature, leading to an election with the NDP winning a majority government. A new budget will be tabled this fall.

The complete report can be found at www.bmocm.com/economics.

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