BMO Economics: New Brunswick Growth Set to Improve in 2013

BMO Economics: New Brunswick Growth Set to Improve in 2013 
- Exports should benefit from U.S. growth 
- Project completions should mean higher output 
- Real GDP growth of 1.6 per cent expected in 2013 (Canada's expected
to be 1.7 per cent) 
FREDERICTON, NEW BRUNSWICK -- (Marketwire) -- 01/17/13 -- A return to
3 per cent-plus growth in the U.S. by the end of the year should
benefit New Brunswick's export sector, according to the Provincial
Monitor report released today by BMO Economics. Growth should come in
at 1.6 per cent in 2013, an increase from 1.0 per cent in 2012. 
"Potash Corp's Sussex mine development and the Point Lepreau nuclear
plant refurbishment will each be completed shortly, leading to higher
output," said Robert Kavcic, Senior Economist, BMO Capital Markets.  
However, capital spending in both the public and private sectors
remains weak as some major projects wind down and fiscal restraint is
ongoing. "Real non-residential construction was down a steep 25 per
cent year-over-year in the third quarter of 2012, largely reflecting
a 40 per cent year-over-year falloff in institutional & government
investment," noted Mr. Kavcic.  
Meantime, with U.S. growth still expected to be soft in the first
half of the year and the loonie around parity, exports and
manufacturing will face ongoing headwinds. Labour market trends
reflect the soft economic backdrop, with employment down 1.9 per cent
year-over-year in December and the jobless rate elevated near 11 per
cent. 
"The forecast for new potash production this year is definitely a
positive, and our business community continues to focus on making
critical investments in their operations to improve productivity,"
said Allison Hakomaki, District Vice President, New Brunswick and
PEI, BMO Bank of Montreal. "Over the past year, many of our exporters
have successfully adapted to the economic reality of a strong loonie
and have diversified their supply chains and export markets beyond
their traditionally strong ties to the U.S. This year they are more
optimistic about their growth prospects, despite the economic
challenges." 
The Province of New Brunswick revised up its fiscal 2012-2013 deficit
estimate to $357 million, or about 1.1 per cent of GDP, from $183
million projected in the budget. The wor
sened outlook is the combined
result of weaker-than-expected tax revenues and higher-than-expected
spending. Total revenues are now pegged at $7.9 billion, a $123
million (-1.8 per cent) reduction from the budget forecast, with more
than half of the revision the result of lower personal income tax
receipts.  
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