TORONTO, June 19, 2013 /CNW/ - Stronger performance in the provincial external trade sector and an
increase in consumer spending will drive Quebec's economic growth
modestly higher in 2013, according to the latest RBC Economics Provincial Outlook issued today. An expected decline in residential investment, among
other factors, will limit the extent to which activity will pick up;
RBC projects provincial real GDP to grow at a rate of 1.4 per cent in
2013 from 1.0 per cent in 2012.
"While this is not set in stone, the first estimate for Quebec's growth
in 2012 came in at 1.0 per cent - the slowest rate for the province in
a non-recessionary period since 1989," said Craig Wright, senior
vice-president and chief economist, RBC. "The good news, however, is
that economic activity has seen a pick-up in recent months - namely, in
manufacturing and exports - which should continue to support growth in
Since the fourth quarter of last year, the RBC Provincial Outlook notes
that there have been notable advances in several of the province's
manufacturing industries, including: primary metals, transportation
equipment, paper chemicals, machinery and equipment, plastic products
and furniture. Growth predominantly occurred in export markets, with
strong gains among Quebec's top export commodities - including
aluminum, aircrafts, iron ore, chemicals, wood pulp, newsprint and
RBC says that while demand did decline for some products, such as
electricity, the recent encouraging developments within Quebec's key
external trade sectors generally support the view that the province's
net exports will be a contributor to growth in 2013.
In fact, RBC's monitoring of monthly GDP estimates from the Institut de
la statistique du Québec (ISQ) suggests that the economy strengthened
in the first quarter of 2013 to a quarterly annualized growth rate of
2.5 per cent, the fastest pace in two years.
The ISQ estimates also indicate that the Quebec retail trade industry
continued to expand for the third consecutive quarter in the first
quarter of 2013 - further evidence that consumer spending is trending
higher and will add to provincial growth for the remainder of 2013.
RBC notes, however, that Quebec's economy continues to face challenges.
In particular, residential construction is now being impacted by slower
housing market activity in the past year, with provincial housing
starts falling more than 15 per cent since last fall. RBC expects
starts to stabilize at recent low levels and total only 38,800 units in
2013, down from 47,400 units in 2012, and that residential investment
will fall this year.
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, Communications, RBC Capital Markets, 416 842-5635