TORONTO, Dec. 13, 2012 /CNW/ - Despite a lacklustre performance in 2012,
Quebec's economy is poised for a slight acceleration in 2013, according
to the latest Provincial Outlook issued today by RBC Economics Research. RBC forecasts provincial growth
of 1.6 per cent in 2013, up from 0.9 per cent in 2012.
RBC indicates that some of the factors contributing to Quebec's economic
weakness in the early part of 2012 - specifically, the six-month labour
disruption at an aluminum plant, the rise in provincial sales tax in
January, the warmer weather conditions and months of student protests -
temporarily weighed on the province's exports, consumer spending, and
demand for electricity and education.
"The disappointing performance across several sectors in Quebec, which
weighed heavily on growth in 2012, will only have fleeting affects on
the provincial economy," said Craig Wright, senior vice-president and
chief economist, RBC. "The reduced impact of these transitory factors,
along with improving U.S. demand for Quebec exports, will brighten the
province's economic prospects and drive the pace of growth next year."
Still, RBC warns that Quebec's economy will continue to face significant
headwinds, largely driven by fiscal restraints at all levels of
government. In its 2013-2014 budget, the provincial government
reiterated its commitment to ambitious program spending targets. These
targets will translate to absolute declines in spending - in areas
other than health, education and family - and will ultimately apply
downward pressure on economic contributions from the public sector.
Following eight years of rapid increases, the Quebec government is
reducing the medium-term infrastructure plan in its budget, which means
that outright capital expenditure cuts will begin in 2013.
Beyond the public sector, RBC expects that the recent cooling in housing
market activity will slow residential investment in 2013.
As demand from the U.S. gains strength and the provincial housing market
stabilizes, RBC anticipates further scope for improvement in Quebec's
outlook with real GDP growth of 1.9 per cent in 2014.
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/market/pdf/provfcst.pdf.
For further information:
Craig Wright, RBC Economics Research, 416-974-7457
Robert Hogue, RBC Economics Research, 416 974-6192
Elyse Lalonde, Corporate Communications, RBC Capital Markets, 416 842-5635