- Strong activity in Ontario and Quebec
- States in the region to build momentum with accelerating U.S. economy
- Possible disruption to NAFTA poses trade challenges to region
MONTREAL, TORONTO and CHICAGO, May 4, 2018 /CNW/ – Building on momentum seen from the previous year, the Great Lakes-St. Lawrence economy is poised to accelerate in 2018, according to a new report from BMO Economics. The report, Partners in Growth and Trade, was released today during a presentation by BMO Chief Economist Doug Porter at the Council of the Great Lakes Region’s fourth Great Lakes Economic Forum in Montreal.
The region includes Ontario and Quebec in Canada, along with Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania and Wisconsin in the United States.
“The Great Lakes-St. Lawrence region is a vital driver of North American economic output, employment and trade, accounting for nearly a third of combined Canadian and U.S. GDP, jobs and exports,” said Mr. Porter. “Its economic output was estimated to reach US$6 trillion in 2017; this outranks Japan, Germany, the U.K. and France, and would represent the third-largest economy in the world – behind the U.S. and China – if it were a country.”
The region also represents an important component of BMO’s cross-border capabilities, given that many of its customers transact in both Canada and the United States. BMO is uniquely and best positioned to serve these customers offering a full spectrum of financing, advisory and wealth management services.
Mr. Porter noted that the the U.S. economy is expected to accelerate this year, growing at a 2.8 per cent clip in 2018 – up from 2.3 per cent last year. In contrast, Canada looks to soften to 2.0 per cent from 3.0 per cent in 2017, as the economy settles back toward potential after a temporary surge. “Ontario’s latest three-year run of near-3 per cent growth was the strongest in 15 years, while Quebec’s, at around 3 per cent, was the strongest since 2000 last year; both are forecast to ease to the low-2 per cent range this year. In contrast, most U.S. states in the region are expected to build on the momentum seen in 2017, which should help nudge up overall growth.”
Mr. Porter also assessed the potential impact of possible trade disruptions, such as a breakup of NAFTA. “To be sure, there are many moving parts when considering the impact – such as currency, price changes, trade substitution with other countries or inter-provincially – but a rough assessment shows that the Great Lakes region would be relatively hard hit.” He noted, however, that while the termination of NAFTA would be a net negative for the overall Canadian economy and a mild negative for the U.S., it remains a manageable risk to which policymakers, businesses, and markets would adjust in relatively short order.
The full report can be downloaded at bmocm.com/economics.
About BMO Financial Group
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider – the 8th largest bank, by assets, in North America. With total assets of CDN$728 billion as of January 31, 2018, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.
SOURCE BMO Financial Group
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