TORONTO, June 11, 2014 /CNW/ - Following the volatility caused by major strikes in the construction
sector last summer, Quebec's economy has experienced fairly steady
growth since and is on track to show a modestly stronger pace of growth
this year and next, according to the latest Provincial Outlook issued today by RBC Economics. RBC is projecting real GDP growth of 1.9
per cent in 2014 and 1.8 per cent in 2015, compared to an estimated 1.1
per cent in 2013.
"So far this year, economic indicators for Quebec suggest that the
provincial economy is expanding," said Craig Wright, senior
vice-president and chief economist, RBC. "Most encouraging is
provincial merchandise exports, which continue to advance - this is a
sector that has run in reverse for the majority of the last 12 years."
The latest data from Institut de la statistique du Québec show that real
merchandise exports rose 4.9 per cent year-over-year in the first
quarter. While exports for aerospace equipment and parts were
essentially flat, exports of many other goods - including minerals and
metals, forest products and heavy trucks - showed considerable
improvement. RBC anticipates strengthening U.S. demand and a more
competitive Canadian dollar will continue to drive demand for Quebec's
exports for the remainder of 2014.
The Provincial Outlook report notes that data so far this year pointed
toward a cooler housing market and slower residential construction,
though poor weather likely exaggerated the softness over the winter.
Quebec's manufacturing sector, however, showed some strength; sales
were up 4.1 per cent year-over-year in the first quarter, with gains
broadly based across industries. Transportation equipment manufacturers
and food producers, in particular, saw very strong increases at 16.8
per cent and 9.0 per cent, respectively.
"Gains in net trade will more than offset weakness in parts of the
domestic economy, including the housing sector," said Wright.
Export-led growth should provide a boost to Quebec's labour market, says
Wright. Since the start of the year, employment stats have been
disappointing - a loss of 43,000 jobs was registered between January
and May. RBC says that while unusually cold temperatures this winter
may be partly to blame, this weakness could also reflect businesses'
hesitation to hire and invest in the province. In fact, a Statistics
Canada survey earlier this year found that private and public
enterprises planned to reduce non-residential capital outlays by 0.3
per cent in 2014.
"As sales abroad continue to increase and as Quebec's overall economic
performance improves, businesses in the province will regain confidence
and begin hiring," said Wright. "We forecast 0.5 per cent employment
growth 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/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