News Releases
CHARLOTTETOWN, January 12, 2011 – Economic growth in Prince Edward Island will be relatively soft this year as stimulus spending winds down, but strength in non-residential construction remains, according to the Provincial Monitor report issued today by BMO Capital Markets Economics.
“After solid growth of 2.6 per cent in 2010, PEI is set to see growth of 1.9 per cent in the coming year,” said Robert Kavcic, Economist, BMO Capital Markets.
“There's good news on the non-residential construction front in PEI,” said Christine Cooper, District Vice-President, New Brunswick and PEI, BMO Bank of Montreal. “Overall building permits have remained strong in recent months; in particular, non-residential permits were up 60 per cent year-over-year through November.”
After a strong start last year, employment has backed off from record April levels amid private-sector job losses. “While public sector job growth was running at a steamy 9.7 per cent year-over-year in the fourth quarter, private sector jobs were down 4.4 per cent year-over-year,” noted Mr. Kavcic. “This has lifted the unemployment rate to 12 per cent after dropping significantly to below 10 per cent early in 2010.”
The Province of Prince Edward Island is projecting a fourth consecutive budget deficit in fiscal 2010/2011, though the shortfall is a marked improvement from last fiscal year. The deficit is expected to be $54.9 million (1.1 per cent of GDP), compared to the prior period's shortfall of $84.2 million. The Province is anticipating a return to balance in four years, though it has not laid out a detailed plan to get there. This year's budget contained no significant new tax or spending measures, and the province will likely lean on a combination of economic recovery and modest spending growth to return to balance in four years.
The complete report can be found at www.bmocm.com/economics.
- 30 -
Media Contacts:
Ronald Monet, Montreal, ronald.monet@bmo.com, (514) 877-1873
Sarah Bensadoun, Montreal, sarah.bensadoun@bmo.com, (514) 877-8224