News Releases

TORONTO, ONTARIO--(Marketwired - May 4, 2015) - Ontario's economy is poised to outperform in 2015, with growth expected to top the national average for the first time in 13 years, according to the BMO Blue Book released today by BMO Capital Markets Economics and BMO Commercial Banking.

Much like the U.S. Federal Reserve's Beige Book, the BMO Blue Book combines the expertise of BMO's economists with information on current business conditions provided to BMO's commercial bankers by local businesspeople.

"Real GDP will likely expand 2.5 per cent this year versus 1.8 per cent nationally, helped by firm U.S. demand, the impact of a weaker currency, low oil prices and a solid housing market," said Robert Kavcic, Senior Economist, BMO Capital Markets.

The combination of stronger U.S. demand, a weaker loonie and now lower oil prices plays right into the hands of exports and manufacturing, an area of the economy that has lagged so far this cycle, according to Mr. Kavcic. "Exports were up a strong 13 per cent year over year in the latest three months, led by autos and machinery & equipment."

The housing market continues to perform well, led by strong conditions in Toronto, where resale prices are pushing record levels. Meanwhile, employment is up a modest 0.6 per cent year over year in the first quarter. "That said, job growth in smaller cities around the Greater Toronto Area has been encouraging; this includes the likes of Barrie, Hamilton and Guelph," noted Mr. Kavcic. "Improved transit to these areas is also a long-run positive."

The jobless rate sat at 6.9 per cent in March, a tick above the national average. "We suspect it will dip below the Canadian rate in the year ahead for the first time in nine years," stated Mr. Kavcic.

Eastern Ontario

According to Sandra Henderson, Senior Vice President, Eastern Ontario Division, BMO Bank of Montreal, a number of farms in the region's agriculture sector are taking advantage of the low interest rate environment to grow their businesses through acquisition. "Additionally, niche, specialized manufacturing fields are seeing a comeback – particularly in knowledge-based industries, of which Ottawa remains a main hub for such companies," said Ms. Henderson. "This is good news for the National Capital Region, with such firms looking to court a high-skilled labour force."

Western Ontario

Curtis Scragg, Senior Vice President, Southwestern Ontario Division, BMO Bank of Montreal, noted that businesses in the region are beginning to feel more confident. "We expect to see our commercial clients' financial statements continue to improve, but the real benefits should be seen over the next year. Additionally, a low interest rate environment will continue to support manufacturing companies with an increase in business activity and a corresponding need to make capital expenditures to modernize processes or acquire equipment."

The Greater Toronto Area

"The Greater Toronto Area remains one of the most vibrant places to do business in all of Canada," said Doug Palmer, Regional Vice President, Commercial Banking, BMO Bank of Montreal. "Businesses here will always benefit from a strong labour pool, and the proximity to large companies and key educational institutions ensures that Toronto's businesses will remain strong and competitive. These factors also contribute to a robust housing market and strong construction activity on both residential and commercial sides."

Mr. Palmer added that BMO's team of experts is here to help customers in the region make decisions that will boost productivity, enable them to expand into new markets and make strategic investment decisions that will propel growth and drive success.

The full BMO Blue Book can be downloaded at www.bmocm.com/economics.

About BMO Financial Group

Established in 1817, BMO Financial Group is a highly diversified financial services provider based in North America. With total assets of approximately $672 billion as of January 31, 2015, and more than 46,000 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, Wealth Management and BMO Capital Markets.