OTTAWA, Dec. 7, 2015 /CNW/ - Following modest growth this year, Quebec's economy is expected to increase by 2.1 per cent in 2016 and another 2 per cent in 2017, according to The Conference Board of Canada's latest Provincial Outlook.
"Robust demand south of the border and a Canadian dollar that remains well below parity with its U.S. counterpart will give a boost to Quebec's exports," said Marie-Christine Bernard, Associate Director, Provincial Forecast. "Exports are forecast to increase by 3.9 per cent in 2016, and that, in turn, will boost machinery and equipment purchases and non-residential construction."
- Real GDP growth is expected to reach 2.1 per cent in 2016 and 2 per cent in 2017.
- The lower Canadian dollar and a stronger U.S. economy will help bolster exports.
- Exports are expected to grow by 3.9 per cent in 2016.
- Real business investment will rebound slightly next year.
The anticipated jump in U.S. demand will give a bump to Quebec's manufacturing sector, which will see output growth rise from 0.8 per cent in 2015 to 2.9 per cent in 2016.
Subsequently, the increase in manufacturing will boost investment in machinery and equipment by 4.2 per cent next year. However, with few major non-residential investment projects under way, non-residential construction will contract again this year but should grow modestly going forward. All in all, the Conference Board expects business investment to rebound by a modest 1.9 per cent in 2016 and 2.1 per cent in 2017. However, residential investment will be a drag on growth over the near term as housing starts are not forecast to post positive growth until 2018.
Consumer spending was a key economic driver of growth in 2015 and will continue to support the economy in 2016. With a 2.2 per cent increase in wages and salaries per employee, sound employment growth, and a declining savings rate, retail sales are forecast to advance 3.7 per cent in 2016.
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