Mixed economic outlook for Quebec's medium sized metropolitan areas in 2017
OTTAWA, Aug. 3, 2017 /CNW/ - Sherbrooke is forecast to post the fastest economic growth among Quebec's medium-sized metropolitan areas this year at 2.0 per cent. Trois-Rivières will be only slightly behind with a 1.7 per cent gain. On the other hand, Saguenay's economy is on track to grow by only 0.9 per cent in 2017, still a notable improvement over the 0.3 per cent increase recorded last year, according to The Conference Board of Canada's Metropolitan Outlook: Summer 2017.
"While Sherbrooke and Trois-Rivières will see economic growth moderate this year, both cities can still expect decent gains thanks particularly to strength in manufacturing," said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada. "A positive, but less buoyant, manufacturing sector also helps explain the modest improvement projected for Saguenay's economy in 2017."
Highlights
- Sherbrooke's economy is expected to grow by 2.0 per cent in 2017.
- Real GDP in Trois-Rivières is forecast to grow 1.7 per cent this year, down from 2.7 per cent in 2016.
- Economic growth in Saguenay is forecast to reach just 0.9 per cent.
Economic growth in Sherbrooke is forecast to remain healthy this year. Recent capacity-augmenting investments by local manufacturing firms will continue to pay dividends, boosting the industry's output by 3.9 per cent in 2017, the fourth consecutive year in which growth will exceed 3 per cent. Construction output will also surpass the 3 per cent mark thanks to a decent pickup in the new home construction, a handful of private non-residential investment projects, and healthy public infrastructure spending. Moreover, solid showings from transportation and warehousing, wholesale and retail trade, and personal services will contribute to 1.5 per cent growth in the city's services sector. Gains in services are forecast despite slowing advances in public administration and non-commercial services (which includes health care and education). Meanwhile, employment growth in Sherbrooke will stay modest at 0.5 per cent this year.
Following last year's 2.7 per cent output jump, the largest in almost 10 years, Trois-Rivières' economy is on track to expand by a further 1.7 per cent in 2017, driven by a 3.5 per cent advance in manufacturing output. Recent investments and upgrades by local firms, such as Kruger's recent conversion of a newsprint machine to a recycled linerboard machine, will start paying dividends. However, trade protectionist rhetoric from the United States could reduce access to the American market and poses a risk for the export-oriented industry. Meanwhile, construction output is forecast to bounce back from four consecutive annual declines with a 1.6 per cent increase this year and another 1.9 per cent gain in 2018. Although hurdles and delays in major projects slated for Bécancour's industrial park have tempered optimism, smaller non-residential projects will keep the industry afloat. In the services sector, the strength in manufacturing and construction will support relatively rapid expansion in business services, and in transportation and warehousing. Unfortunately, employment increases are expected to be limited to just 0.5 per cent this year and next.
Following a lacklustre 0.3 per cent expansion in 2016, Saguenay's real GDP is forecast to gradually improve this year and next, climbing by 0.9 per cent in 2017 and by 1.1 per cent in 2018. The improvement starts in the goods sector where all three high-level industries—manufacturing, construction, and primary and utilities—are on track to rebound from multi-year declines. The manufacturing sector's 0.9 per cent output expansion will be fueled in part by increased production at Rio Tinto's Arvida smelter. The construction industry will recover as private non-residential activity improves and government infrastructure spending ramps up. The stronger economic growth will boost employment by 1.9. per cent in 2017 and a further 0.6 per cent in 2018. This should help push the unemployment rate down from 8.0 per cent in 2016 to 7.3 per cent next year.
The Metropolitan Outlook: Summer 2017 is The Conference Board of Canada's analysis of 15 medium-sized Canadian census metropolitan areas (CMAs). Alan Arcand will present detailed findings from this report at a live webinar on August 31, 2017 at 11:00 AM EDT.
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