BMO Predicts Continued Economic Strength and Business Confidence for NL

The consistent strength of the provincial economy, along with continued consumer and business confidence, was highlighted in the BMO Blue Book released yesterday (Wednesday, May 8). The Honourable Jerome Kennedy, Minister of Finance and President of Treasury Board, said the report demonstrates how prudent fiscal management by the Provincial Government and investments in equity shares in projects such as Muskrat Falls and Hebron are benefitting residents of the province now and into the future.

“We have seen significant growth in the provincial economy and we expect this growth again in 2013,” said Minister Kennedy. “Our government will continue to encourage private sector investment to stimulate further growth in all regions of our province, support our local companies, attract external investors to encourage new business activity, and provide a competitive tax regime. This report, along with discussions with economists, has confirmed what we have known for some time – that there has never been a better time to live, work or raise a family in Newfoundland and Labrador.”

BMO noted in its report that construction and capital investment activity have been key economic drivers in the province in recent years, and growth is expected to remain solid this year. Investment in the oil and gas sector is expected to increase by 83 per cent as construction of the Hebron project ramps up. The report also highlighted that the jobless rate sits near a record low, and that average weekly earnings growth is also strong, supporting personal incomes and consumer spending.

“BMO noted that projects such as Muskrat Falls and Hebron are leading to contracts for work, and people are seeing the benefits of that,” said Minister Kennedy. “It is encouraging to have an independent source confirm the ‘consistent strength’ of our economy, and to highlight increased consumer confidence.”

In Budget 2013: A Sound Plan, A Secure Future, the Provincial Government outlined its expectations for a robust economy again in 2013, with increased exports, investment and consumption more than offsetting a reduction in government spending. Projections for 2013 can be found in the backgrounder below.

“The Provincial Government remains focused on the province’s long-term prosperity by encouraging job creation, strong communities, a vibrant economy and natural resource development that is of maximum benefit to Newfoundlanders and Labradorians,” said Minister Kennedy. “Through sound fiscal management and responsible decisions, we are strengthening the business environment, encouraging the development of innovative industries, and diversifying the economy. “

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.

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Media contact:
Tansy Mundon
Director of Communications
Department of Finance
709-729-6830, 693-1865
tansymundon@gov.nl.ca 

Backgrounder: Provincial Government Economic Projections for 2013

The following are the Provincial Government’s economic projections for 2013:

• Employment growth of 2.8 per cent. Average employment in the province was 230,500 in 2012, representing an increase of 18,700 or 8.8 per cent since 2003. More people are working than at any other time in the province’s history;
• The unemployment rate is expected to decrease by 1.0 percentage point. Since 2003 the unemployment rate has declined by 3.9 percentage points;
• Personal income growth of 7.3 per cent. From 2003 to 2012, personal income increased by 61.3 per cent;
• Disposable income growth of 7.1 per cent. From 2003 to 2012, disposable income increased by 63.7 per cent;
• Retail sales growth of 4.2 per cent. From 2003 to 2012, retail sales increased by 43.0 per cent;
• Population increase of 0.3 per cent in 2013 due mainly to positive net in-migration;
• Capital investment growth of 17.4 per cent to $11.8 billion in 2013. From 2003 to 2012, investment increased by 170.4 per cent;
• Mineral shipments to increase by about 28.4 per cent to $4.9 billion. From 2003 to 2012 mineral shipments increased by 393.6 per cent; and,
• An increase in total overnight tourist visits by about 1.4 per cent.

2013 05 09             12:40 p.m.