VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 7, 2014) - Growth in British Columbia is sturdy and in line with the national average, 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.
Mike Bonner, Senior Vice President, British Columbia and Yukon Division, BMO Bank of Montreal, notes that BMO customers across the province are increasingly seeing opportunities for growth and investment. "Businesses operating in knowledge based industries, healthcare and franchising are particularly interested in expanding their operations and BMO has the resources to help them grow."
"Real GDP is expected to grow 2.2 per cent this year and 2.5 per cent in 2015, tracking the broader Canadian economy," said Robert Kavcic, Senior Economist, BMO Capital Markets. "The return to national average growth rates is a result of a handful of factors, including a softer housing market, downshift in employment and consumer spending, and a cooling of investment in the mining sector."
Mr. Kavcic noted that B.C.'s housing market has balanced out after a post-mortgage rule change, particularly in Vancouver, where existing home sales are running close to the 10-year average and prices have stabilized. "Still, valuations remain elevated by historical and major-city standards after accounting for incomes and mortgage rates."
Mr. Kavcic also noted that forestry exports should continue to rebound as the U.S. housing market regains momentum in the spring.
"Forestry-related businesses are showing positive trends," said Sean Armstrong, Regional Vice President, Commercial Banking, B.C., Vancouver Island and Yukon, BMO Bank of Montreal. "With the lower dollar and a stronger U.S. housing industry, we expect continued growth for our customers. On the agricultural side of our books, free trade agreements with Asian overseas markets have the potential to open up markets for soft fruits and wines."
Mr. Armstrong noted that on the energy side, the formal approval of pending LNG projects should trigger additional economic expansion, particularly in the Northern part of the province.
"Our clients are telling us that the positive trends from last year, featuring robust business sentiment, are continuing. With the U.S. economy continuing its own recovery, businesses in B.C. continue to feel more optimistic," said Dean Kirkham, Regional Vice President, Commercial Banking, Greater Vancouver, BMO Bank of Montreal. "The agriculture sector is a particularly interesting story for the Greater Vancouver Area as it represents a significant part of our loan book, and we continue to see a positive outlook. There is still significant consolidation, leading to larger operations and a corresponding growth in borrowing."
Mr. Kirkham added that BMO is armed with a highly-skilled team of experts who can make lending decisions at the local level to help their commercial clients boost productivity, expand into new markets and make strategic investment decisions that will help 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 as Bank of Montreal, BMO Financial Group is a highly diversified financial services organization based in North America. The bank offers a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers. BMO Financial Group had total assets of $593 billion and more than 45,500 employees at January 31, 2014.
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Source: BMO Financial Group