BMO Economics: PEI Economy Experiencing Sturdy Growth

BMO Economics: PEI Economy Experiencing Sturdy Growth 
- Export sector showing improvement  
- Real GDP growth of 1.5 per cent expected in 2013 (Canada's expected
to be 1.7 per cent) 
CHARLOTTETOWN, PRINCE EDWARD ISLAND -- (Marketwire) -- 01/17/13 --
The Prince Edward Island economy is growing at a sturdy pace,
according to the Provincial Monitor report released today by BMO
Economics. Real GDP expected to rise 1.5 per cent in 2013. 
"Exports continue to perform well, up 25 per cent year-over-year
through October, led by a surge in aerospace shipments," said Robert
Kavcic, Senior Economist, BMO Capital Markets. "The Province also
recently announced that the Aerospace Tax Rebate Program for
companies maintaining 20 employees on a payroll in excess of $700,000
a year will be extended for another 10 years." 
"Businesses in the province continue to be cautiously optimistic.
They are making targeted business investments to strengthen their
productivity and future growth prospects," said Allison Hakomaki,
District Vice President, New Brunswick and PEI, BMO Bank of Montreal. 
While down from a 1.8 per cent pace in 2011, population expanded a
still-solid 1.1 per cent in 2012. "This level of expansion is
supporting consumer spending and housing, albeit at a cooler pace,"
noted Mr. Kavcic. "Job growth was decent at 1.0 per cent in 2012, as
solid gains in the private sector - mainly in the service sector -
outweighed cuts in the public sector. At 11.0 per cent, the
province's jobless rate ended 2012 in line with the average of the
past three years, and it's expected to hold steady through the
forecast horizon." 
Public-sector capital spending is projected to cool in the years
ahead as the Province shifts its focus to fiscal restraint. The
latest capital plan calls for a net $69.5 million in spending in
fiscal 2013-2014, down from the latest estimate of $89.5 million in
fiscal 2012-2013, and it will gradually fall further to $52 million
by fiscal 2015-2016. Real institutional & government construction was
down more than 27 per cent year-over-year through the third quarter
of 2012, offsetting solid growth in the industrial space. 
The Province of Prince Edward Island revised up its deficit
projection to $79.6 million (1.5 per cent of GDP) in fiscal
2012-2013, vers
us $74.9 million estimated in the budget. The modestly
worse position comes as a $12.3 million revenue downgrade outweighs a
$7.6 million reduction in spending, relative to the budget plan. The
Province is targeting fiscal 2014-2015 for a balanced budget through
a combination of spending restraint and additional revenues raised
through the harmonization of its sales tax with the Federal
government.  
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 $525 billion as at October 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 Contact:
Valerie Doucet, Montreal
(514) 877-8224
valerie.doucet@bmo.com 
Internet: www.bmo.com
Twitter: @BMOmedia
 
 
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