News Releases

TORONTO, ONTARIO--(Marketwire - May 9, 2012) - BMO Bank of Montreal today released a study that shows that by a two to one margin Canadian business owners expect the U.S economy to improve.

According to the BMO survey, 18 per cent of businesses believe the U.S. economy will improve before the November elections, while 32 per cent expect the U.S. economy will pick up after the vote. One quarter (27 per cent) don't believe the American economy will strengthen even after the Presidential election.

"As our largest trading partner, the overall health of the U.S. economy, and the speed at which it continues to recover, has a direct impact on the growth plans and performance of a significant number of Canadian businesses," said Cathy Pin, Vice President, Commercial Banking, BMO Bank of Montreal.

"The outlook for many of Canada's industries still depends quite heavily on the fate of the U.S. economy, with more than 70 per cent of our exports bound for that market," said Doug Porter, Deputy Chief Economist, BMO Capital Markets. "While that share has dropped from more than 80 per cent 10 years ago, no other economy comes close to the U.S. weight in our trade flows."

Mr. Porter noted that while the U.S. economy continues to face important challenges, BMO Economics is predicting growth to pick up this year to nearly a 2.5 per cent pace, and just over that threshold in 2013.

Reliance on U.S. Markets

While only one-quarter of businesses surveyed indicated they are at least somewhat reliant on the U.S., regional differences are significant with businesses in Ontario most strongly connected and reliant on U.S. markets (30 per cent), and those in Eastern Canada markedly less at 15 per cent.

In addition, the BMO Study found that of those companies who rely on the U.S. they do so primarily for importing of products or services (47 per cent), and to a lesser degree for exporting (40 per cent).

"In the wake of the global credit crisis, business learned the dangers of too much reliance on a single customer, sector or market," said Ms. Pin. "Canadian businesses have worked to diversify their supply chains, and on the export side there are significant and growing export opportunities to emerging nations and the unprecedented ability to invest through imports."

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.