Robert Hogue, senior economist, RBC, discusses Quebec's economic prospects
TORONTO, March 19, 2014 /CNW/ - A further improvement in Quebec exports
alongside an abating drag from housing will lay the groundwork for an
acceleration in provincial economic growth in 2014, according to the
latest Provincial Outlook issued today by RBC Economics. RBC is forecasting real GDP growth of
1.9 per cent in 2014 and 1.8 per cent in 2015.
The Institut de la statistique du Québec's Q3 2013 expenditure account
estimates show that the province's trade deficit shrunk in the first
three quarters of last year, as exports grew faster than imports for
the first time in at least six years.
"Full-year stats on Quebec's major export categories point to increases
in 2013, most noticeably in aluminum and aircrafts and parts," said
Craig Wright, senior vice-president and chief economist, RBC. "In many
cases we see these gains as just the beginning - strengthening demand
from the U.S. and a weaker Canadian dollar will further lower the trade
deficit in 2014 and beyond."
The Provincial Outlook notes that non-residential investment in Quebec
is likely to slow in 2014 from the meaningful gains logged last year
when business spending on building construction rose, as did spending
on machinery and equipment.
The recent P&PI survey indicated that businesses in the province are
considering cutting 0.3 per cent in non-residential capital outlays in
2014. This overall reduction will largely stem from a significant $1.2
billion or 16.6 per cent drop in spending by utilities, says RBC.
Notable spending increases are planned, however, in Quebec's
manufacturing, transportation services and public administration
sectors. RBC indicates that an 8.2 per cent boost in public
administration will occur at the provincial level in 2014; the economic
stimulus plan announced in October 2013 is scheduled to start deploying
some of its $2 billion worth of measures over four years.
RBC also says that the magnitude of the drag on growth caused by the
residential sector will not carry over in 2014. There were significant
declines in home resales and housing starts in Quebec last year.
"Although we expect further weakening in housing activity this year, the
pace of decline is likely to moderate as job prospects seem to be
improving and there is limited downside left," added Wright.
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