TORONTO, March 12, 2015 /CNW/ - As a large oil importer and a major exporter of an array of products,
Quebec's economy stands to benefit from the plunge in oil prices and
the associated weakening in the Canadian dollar, according to the
latest Provincial Outlook issued today by RBC Economics. RBC is projecting real GDP growth of 2.0
per cent in 2015 - an improvement from the estimated rate of 1.5 per
cent in 2014 and an average of 1.2 per cent in 2013 and 2012.
"Quebec's economy is even more ready than we previously thought for
achieving a four-year high growth rate in 2015," said Craig Wright,
senior vice-president and chief economist, RBC. "Still, there will
continue to be factors holding back the pace of growth - 2.0 per cent
is far from a boom."
A shrinking pool of working age people and relatively restrictive fiscal
policy amid efforts to return the provincial budget to balance are
among the factors restraining growth in 2015, RBC says. The outlook for
2016 is reasonably positive, with growth expected to be 1.9 per cent.
RBC expects significant advances in foreign trade to continue as a
distinguishing feature of Quebec's economic landscape in 2015. This
sector is expected to be a primary driver of growth, with positive
implications for Quebec's manufacturers, who will be able to build on
their impressive 6.5 per cent sales increase in 2014 - the biggest gain
in 14 years for the province.
The Provincial Outlook report indicates that the vigour in external
trade is expected to spread to other sectors and help re-invigorate
Quebec's job market, following a disappointing year in 2014. Tentative
signs of a recovery in hiring late last year will set the stage for
more convincing gains throughout 2015. Still, RBC projects employment
to grow by only 0.9 per cent this year, standing slightly below the
average of 1.0 per cent since the end of the recession.
"Rapid growth in the number of people of retirement age poses challenges
for the labour market and the general economy in Quebec," said Wright.
"It causes the pool of working-age people to shrink and acts as an
impediment to the overall growth of the provincial economy."
Improving job prospects, exceptionally low interest rates and the drop
in gasoline prices will lay the foundation for an increase in consumer
spending in Quebec, RBC says. The rise will materialize in retail
stores and other sectors, such as housing. The report notes that home
resales are likely to heat up a little and renovation activity is
expected to remain brisk. A high inventory of unsold condo units will
likely weigh on new home construction however - RBC expects housing
starts to ease to 36,900 units in 2015.
The RBC Economics Provincial Outlook assesses the provinces according to
economic growth, employment growth, unemployment rates, retail sales,
housing starts and consumer price indices. The full report and
provincial details are available online as of 8 a.m. ET today at rbc.com/economics/economic-reports/provincial-economic-forecasts.html.
For further information:
Craig Wright, RBC Economics Research, 416-974-7457
Robert Hogue, RBC Economics Research, 416-974-6192
Elyse Lalonde, Communications, RBC Capital Markets, 416-842-5635