OTTAWA, Nov. 14, 2016 /CNW/ - The Montreal and Quebec City economies have both seen modest improvement this year, and the gradual upward trend is forecast to continue in 2017, according to The Conference Board of Canada's Metropolitan Outlook: Autumn 2016.
"Quebec's two largest metro economies are on track to expand at a faster rate than Canada as whole this year, the first time this has happened since 2009," said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada. "Montreal's economic improvement is being driven by massive infrastructure investments and widespread gains across the services sector. While an uptick in public sector activity, along with solid gains in manufacturing and tourism, are supporting stronger growth in Quebec City."
- Montreal's economy is expected to grow by 1.6 per cent in 2016 and an additional 2 per cent next year.
- Real GDP growth in Quebec City is forecast to reach 1.7 per cent in both 2016 and 2017.
- Vancouver is expected to have the fastest-growing metropolitan economy this year and next, with growth of 4 per cent and 2.8 per cent respectively.
Montreal's economy is forecast to advance by 1.6 per cent this year and by 2 per cent next year, following a 1.1 per cent gain in 2015. Transportation and warehousing is expected to be this year's growth leader, the second consecutive year it can make this claim, as the lower Canadian dollar boosts export activity and thus transportation services. Tourism, a key export sector, is also providing a lift to personal services, which includes accommodation and food, arts and entertainment, and recreation. The personal services sector is set to have another solid year in 2017, as tourists come to the city to take part in 375th anniversary celebrations. Relatively stable employment growth averaging 1.1 per cent both this year and next and a falling unemployment rate will also help encourage consumers to spend, thereby boosting wholesale and retail trade.
The news is more mixed in the goods sector. The construction sector is receiving a big lift from a number of big public infrastructure projects, particularly the Turcot Interchange and Champlain Bridge, but this is being offset by falling housing starts. Following three years of declines, Montreal's construction industry is expected to post flat growth this year, before expanding by a modest 0.9 per cent next year. At the same time, manufacturing output growth is projected to reach just 0.3 per cent this year, before improving to 1.8 per cent in 2017. Part of this year's weakness stems from lower than expected production of Bombardier's CSeries jet.
Québec City's real GDP growth is forecast to accelerate from 0.9 per cent in 2015 to 1.7 per cent in each of the next two years. Quebec City's manufacturing industry is on track to expand for the fourth consecutive year, thanks in part to the lower Canadian dollar. Like Montreal, the lower dollar is also boosting tourism, and personal services. Quebec City's status as provincial capital means the public sector plays an important role in the metro area's economy. Thus, our forecast of gradual strengthening in both public administration and non-commercial services output is another positive development. On a somewhat negative note, construction output growth will be limited by falling housing starts in both 2016 and 2017. Despite the healthy economic outlook, employment is expected to see its steepest decline since 1997 this year, though this follows strong growth in 2015. Fortunately, things are expected to turn around quickly, with job growth forecast to hit 2.6 per cent in 2017.
Vancouver is expected to boast the fastest-growing metropolitan economy this year and next, among the 13 metro areas covered in this edition of the Metropolitan Outlook. At the other end of the spectrum, the economies of Calgary and Edmonton are expected to contract for a second year in a row in 2016, before rebounding modestly next year.
Join Alan Arcand on November 22, 2016 for a webinar, Beyond Slogans: Comparing Canadian Cities to the World's Best, which describes how five Canadian cities—Toronto, Montréal, Vancouver, Calgary, Halifax—compare economically and socially against some of the leading metropolitan areas in the world.
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