BMO Economics: Alberta to Lead Canada in Growth in 2012
October 09 2012 - 11:30AM
Marketwired
Alberta's economy continues to outperform amid rising oil
production and accelerating inward migration, according to the
Provincial Monitor report released today by BMO Economics. The
province will sit atop the Canadian leaderboard this year, with
growth hitting 3.5 per cent before falling back slightly to 2.9 per
cent in 2013.
"The energy sector remains the key driver of economic activity
in the province, with crude bitumen production up 16 per cent
year-over-year through the first half of the year, and the Energy
Resources Conservation Board expecting oil sands output to more
than double by 2021," said Robert Kavcic, Economist, BMO Capital
Markets.
"Businesses in the private sector continue to be driving
Alberta's economic growth by making important strategic investments
and by focusing on opening up new markets," said Bill Hogg,
District Vice President, Commercial, Alberta, BMO Bank of Montreal.
"Our recent BMO Small Business Confidence Report shows that
Albertan entrepreneurs have the most positive outlook in the
country, with 70 per cent saying 2013 will be a better year and 55
per cent believing their business will experience growth in the
year ahead."
Mr. Kavcic did note some potential risks to the oil sector.
"Cost pressures could again pick up, though oil sands operations
are generally viewed as economical at prices above $80. Also,
wrangling over new pipeline capacity continues. In the meantime,
more Bakken production-filling limited pipeline capacity-has
contributed to a wider discount received by Canadian producers
relative to WTI. Estimates suggest that production in Western
Canada could be negatively impacted by 2015/16 if there is not
enough new pipeline capacity put in place."
Strength in the energy sector has helped spur net in-migration,
which hit the highest since the 2006 boom in the first quarter of
2012. Labour market trends, while favourable, have ebbed from an
extremely robust performance last year. Private-sector job growth
has levelled off, up 2.7 per cent year-over-year in September; most
of the cooling has been in services, as growth in resources and
construction is still strong.
"The 4.4 per cent jobless rate remains the lowest in Canada,"
said Mr. Kavcic. "Housing market activity is improving thanks to
rising demand and a gradual drawdown of the excess supply put up
during the 2005-07 boom. In Calgary, prices were up 6.8 per cent
year-over-year in September, and have regained about half of the
declines seen during the recession."
The full Provincial Monitor can be downloaded at
www.bmocm.com/economics.
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 $542 billion as at July 31,
2012, and more than 46,000 employees, BMO Financial Group provides
a broad range of retail banking, wealth management and investment
banking products and solutions.
Contacts: Media contacts: Laurie Grant, Vancouver (604)
665-7596laurie.grant@bmo.com Internet: www.bmo.com Twitter:
@BMOmedia
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