The Canadian economy is on track to match its strongest annual growth performance since the financial crisis, according to forecasts in the BMO Blue Book released Oct. 30 by BMO Capital Markets Economics and BMO Commercial Banking.
The BMO Blue Book combines views from BMO's economists with information on current national and provincial business conditions provided to BMO's commercial bankers by local businesspeople.
Gap in provincial output narrows
"Real GDP is likely to expand 3.1 per cent this year," said Robert Kavcic, Senior Economist, BMO Capital Markets in an announcement. "The big story at the regional level is a narrowing gap between the best and worst performers, as the recession fades in oil-producing provinces, while British Columbia and Central Canada should moderate after a few years of blistering growth."
Canadian business owners expect to see more opportunities to boost productivity and expand into new markets, forecasts the BMO Blue Book.
"Even those in export industries whose businesses have been challenged as a result of a relatively higher dollar are modernizing where they can and taking advantage of a low interest rate environment," said Andrew Irvine, Head of Business Banking and BMO Partners, BMO Bank of Montreal. "If there's an area of excitement we've picked up on, it lies in the growth of innovation – efficiencies that can position companies well now and in coming years."
Some highlights from the Blue Book’s 2017 provincial forecasts include: 4.1 per cent growth for Alberta’s economy “outperforming all provinces after overcoming the negative impact of the wildfire last year.”
Meanwhile Saskatchewan is expected to return to modest growth of 1.7 per cent, as the effect of the oil price downturn lingers.
Ontario is looking at 3 per cent growth and Quebec 2.7 per cent. New Brunswick should see growth of 1.5 per cent, “before decelerating to under 1 per cent next year as a result of demographic headwinds.”