Quebec's economy staying above water, says RBC



    TORONTO, Oct. 8 /CNW/ - Steering just clear of a recession in the first
half of this year, Quebec's economic growth is projected to strengthen from an
anemic 0.7 per cent in 2008 to 1.4 per cent in 2009, according to the latest
provincial economic forecast released today by RBC.
    "Strong spending by consumers and governments have saved the day so far
in 2008, offsetting weakness in net exports, forest products, large parts of
the manufacturing sector and residential construction," said Craig Wright,
senior vice-president and chief economist, RBC. "However, concerns about
Quebec's softening economy will likely persist in the near term, as both the
external and domestic sides face challenges."
    With rough waters rocking the U.S. and Ontario economies, Quebec's
external trade will show little improvement. Waning job creation and rising
unemployment will erode Quebec's consumer confidence and as a result cool
consumer spending, housing activity and residential construction. In short,
the pace of overall activity will slow to a crawl, noted Wright.
    Nonetheless, steady increases in machinery and equipment investment, and
the continued boom in capital investment projects in the public sector are
expected to drive moderate economic growth in Quebec.
    The report noted that Quebec's economic growth should rebound modestly in
2009. While the province's picture is unlikely to change much from the latter
part of 2008, some amelioration is expected on the external side later next
year, as U.S. demand begins to recover and a gradual depreciation of the
Canadian dollar help stabilize Quebec exports and alleviate some of the drag
on the province's economy.
    The outlook for provinces has generally darkened as a result of the
recent dramatic turn in the year-long financial market crisis. The U.S.
economy now appears to be in recession with Europe, the U.K. and Japan also
sinking fast. While Canada is in better position with its financial sector
less heavily impaired, overall growth will be substantially weaker than
previously anticipated.
    Among the provinces, Saskatchewan will lead the way this year and next in
terms of economic growth, with Manitoba closely behind. The Atlantic region is
expected to display continued resilience and should sustain a moderate pace of
expansion for the most part. Conditions in the most western part of the
country are on a deteriorating path. Eroding housing situations and rapidly
slowing growth in consumer spending have prompted downward revisions to the
forecasts for British Columbia and Alberta. With weak external trade
continuing to exert a toll, cracks have appeared in the domestic foundations
of Ontario and Quebec. Ontario will likely see its growth evaporate.

    The RBC Economics Provincial Outlook assesses the provinces according to
economic growth, employment growth, unemployment rates, personal income
growth, retail sales, housing starts, and the Consumer Price Index.
    According to the report (available online as of 8 a.m. E.D.T., at
www.rbc.com/economics/market/pdf/provfcst.pdf) provincial forecast details are
as follows:

    
                    Real GDP           Housing starts         Retail sales

                                         Thousands
                07     08     09      07     08     09      07     08     09
                --     --     --      --     --     --      --     --     --
    NFLD.      9.1    0.2    1.3     2.6    2.8    3.0     9.0    8.0    4.0
    P.E.I.     2.0    1.9    1.4     0.8    0.7    0.5     7.7    5.5    3.5
    N.S.       1.6    2.0    2.0     4.8    4.2    3.2     4.2    5.5    4.0
    N.B.       1.6    2.0    2.5     4.2    4.1    3.3     5.7    5.5    4.0
    QUE.       2.4    0.7    1.2    48.6   45.7   39.0     4.6    5.5    3.5
    ONT.       2.1    0.0    0.4    68.1   75.0   66.5     3.9    5.0    2.8
    MAN.       3.3    3.1    2.3     5.7    5.4    5.4     8.8    8.0    5.5
    SASK.      2.8    3.9    3.5     6.0    6.8    5.3    13.0   12.0    7.5
    ALTA.      3.3    2.2    3.0    48.3   30.2   31.3     9.3    1.5    6.5
    B.C.       3.1    1.2    2.1    39.2   34.8   26.0     6.7    3.0    6.5
    CANADA     2.7    0.9    1.5     228    209    183     5.8    4.7    4.3


                  Employment                CPI


                07     08     09      07     08     09
                --     --     --      --     --     --
    NFLD.      0.7    2.0    0.6     1.4    3.1    2.1
    P.E.I.     1.1    1.7    0.5     1.8    3.8    2.4
    N.S.       1.3    1.1    0.9     1.9    3.6    2.3
    N.B.       2.1    0.9    0.9     1.9    2.2    2.1
    QUE.       2.3    0.8    1.1     1.6    2.5    2.0
    ONT.       1.6    1.5    1.2     1.8    2.6    2.0
    MAN.       1.6    1.8    1.5     2.1    2.5    2.6
    SASK.      2.1    1.6    2.0     2.9    3.4    2.7
    ALTA.      4.7    2.6    2.1     4.9    3.7    2.9
    B.C.       3.2    2.4    1.4     1.7    2.5    2.0
    CANADA     2.3    1.6    1.3     2.1    2.7    2.2
    





For further information:

For further information: Craig Wright, RBC, Economics, (416) 974-7457;
Robert Hogue, RBC, Economics, (416) 974-6192; Jackie Braden, RBC, Media
Relations, (416) 974-2124


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890