HALIFAX, NOVA SCOTIA--(Marketwired - Oct 30, 2013) - Economic growth in Nova Scotia is poised to pick up modestly next year alongside a pickup in natural gas production and ongoing work at the Irving shipyard, according to the Provincial Monitor report, released today by BMO Economics. Real GDP is on pace to grow 1.2 per cent this year before picking up to a firmer 1.8 per cent pace in 2014.
"Irving Shipbuilding's $25 billion contract to build combat ships for the Royal Canadian Navy, through 2030, remains a promising economic support with preparatory work underway," said Robert Kavcic, Senior Economist, BMO Capital Markets. "While clearly positive for the Nova Scotia economy over the medium term, the massive project is not without challenges. Among these is the availability of skilled labour, some of which continues to migrate to more prosperous labour markets in Western Canada."
Exports are expected to pick up in 2014, fueled by production from the Deep Panuke natural gas project expected to add to growth. "Offshore exploration activity is picking up, with BP/Shell completing seismic imaging and potentially beginning to drill by 2015," noted Mr. Kavcic. "Auto-related exporters will also continue to benefit from strong North American sales."
Nova Scotia's jobless rate remains low by Atlantic Canada standards, at 8.6 per cent. "Outward migration, a soft labour market and fading initial optimism over the shipbuilding contract have led to a softer housing market, particularly in Halifax," said Mr. Kavcic.
"Our small and medium sized business clients remain cautiously optimistic about current economic conditions in Nova Scotia. The highly anticipated ship building contract has yet to manifest itself significantly in the market but our clients are not standing still," said Allison Hakomaki, Vice-President of Commercial Banking for Atlantic Canada at BMO Bank of Montreal.
"As the local economy continues to chug along at a moderate pace, Nova Scotia businesses continue to innovate, to seek new markets and to make strategic investments to drive efficiency and profit. BMO is proud to stand with its clients as they invest today and prepare for opportunities tomorrow," added Ms. Hakomaki.
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 $549 billion as at July 31, 2013, and more than 46,000 employees, BMO Financial Group provides a broad range of personal and commercial banking, wealth management and investment banking products and solutions.