Canada's Economy Shows Three Reasons for Optimism Heading Into 2027, BMO Says
Bank of Montreal (BMO) said it sees at least three reasons for optimism about the Canadian economy heading into late 2026 and next year. First, growth appears to be recovering after a period of weakness, wrote BMO in a note published on Friday. Real gross domestic product rose 0.5% on the month in April, with early signals pointing to further gains in May and June, suggesting Q2 growth near 2% after near-stagnation. There are also early signs that housing activity is bottoming out in major cities, stated BMO's chief economist Douglas Porter. Second, momentum in major projects is improving, highlighted by recent progress on a potential one million barrels per day pipeline from Alberta to the British Columbia coast, added the bank. While still early, this points to growing alignment on large infrastructure projects and could support further investment. Third, equity market strength points to improving growth conditions, according to BMO. Historically, rallies -- as witnessed over the past two year -- have aligned with stronger economic periods and may also support consumer spending through wealth effects.
Bank of Montreal (BMO) said it sees at least three reasons for optimism about the Canadian economy heading into late 2026 and next year.
First, growth appears to be recovering after a period of weakness, wrote BMO in a note published on Friday.
Real gross domestic product rose 0.5% on the month in April, with early signals pointing to further gains in May and June, suggesting Q2 growth near 2% after near-stagnation.
There are also early signs that housing activity is bottoming out in major cities, stated BMO's chief economist Douglas Porter.
Second, momentum in major projects is improving, highlighted by recent progress on a potential one million barrels per day pipeline from Alberta to the British Columbia coast, added the bank.
While still early, this points to growing alignment on large infrastructure projects and could support further investment.
Third, equity market strength points to improving growth conditions, according to BMO.
Historically, rallies -- as witnessed over the past two year -- have aligned with stronger economic periods and may also support consumer spending through wealth effects.