According to the BMO Blue Book, a joint publication of BMO Capital Markets Economics and BMO Commercial Banking, the B.C. economy will slow in 2011.
“Across the country, the outlook of our business customers reflects growing, but cautious, optimism,” said Gail Cocker, senior vice-president, commercial and treasury management, BMO Financial Group.
“The most encouraging news, however, is reflected in an increasing number of firms willing and able to invest in their operations to improve their productivity.”
In B.C., growth is expected to moderate to 3% in 2011, as residential construction cools and U.S. forestry demand remains soft.
The report predicts growth should hold around 3% through 2012 thanks in part to strong Asian export demand and energy-sector investment.
The most active sector as indicated by the report is junior miners in B.C.
“We’re seeing internationally based businesses in that sector build mines, sell them off and use the proceeds to start new, bigger ventures – a process helped by the current strong level of commodity prices and the high Canadian dollar. Large deals are practically routine at the moment.”
Newfoundland and Alberta are predicted to experience the biggest gains through oil prices, with 4% and 3.6% growth rates respectively.
According to the report, a clear divide has emerged between the commodity-producing provinces and the non-commodity provinces, and firm resource prices should continue to feed this trend.
Jennifer Harrison