TORONTO, Sept. 17, 2013 /CNW/ - Despite some turbulence in the second
quarter, Quebec's economic performance will continue on track this year
and next, according to the latest RBC Economics Provincial Outlook issued today. RBC projects provincial real GDP to grow at 1.3 per cent
in 2013 and 1.9 per cent 2014, thanks to a turnaround in exports, a
diminishing drag from weakness in the construction sector and a boost
in household spending.
Following a respectable start to the year, the latest data from the
Institut de la statistique du Québec (ISQ) indicates that the economy
may have contracted in the second quarter, as several sectors of the
economy showed weakness, most notably in construction.
"While there was evidence of slowing activity much earlier, major labour
strikes in Quebec significantly disrupted construction in June," said
Craig Wright, senior vice-president and chief economist, RBC. "Monthly
housing starts trailed 22 per cent below the 10-year average in the
second quarter, while units under construction fell nearly nine per
cent from the year earlier level."
Nonetheless, RBC says there continues to be encouraging signs in
Quebec's economy. In particular, business picked-up in several
manufacturing industries in the second quarter, including: primary
metals, transportation equipment, wood products, chemicals, electrical
equipment, and furniture.
For the most part, Quebec's export markets are growing. In fact, top
export commodities such as aluminium, aircrafts and parts, electricity,
wood pulp, and softwood lumber recorded noticeable gains so far this
year. RBC expects this upswing in Quebec's trade performance to be
sustained through 2014.
"External trade will provide a more visible boost to provincial growth
in 2014, when the drag from construction starts to diminish and
household spending strengthens," noted Wright. "We believe that the
decline in residential construction will stabilize next year, with
housing starts rising modestly from the low levels seen this year."
A net loss of 51,000 jobs between January and August of this year -
mostly full-time and the majority in the private sector - were a
contributing factor to the bumpy ride that the Quebec economy
experienced earlier this year, says RBC.
"Dimmer employment prospects so far this year quite possibly weighed on
consumers, as spending at retail stores stayed essentially flat in real
terms. We expect to see some labour market improvement in the period
ahead, which should support stronger household spending," 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 www.rbc.com/economics/economic-reports/provincial-economic-forecasts.html.
SOURCE RBC
