Highlights
- According to the Conference Board of Canada, the Quebec City census metropolitan area (CMA) recorded real GDP of $34 billion in the third quarter of 2014, up 1.9% from one year previously.
- Manufacturing output was up 4.6% while the services sector posted a 2.2% increase.
- The construction industry continued its downturn for the fifth consecutive quarter with a year-over-year drop of 2.3%.
- This brings the cumulative real GDP increase for the first nine months of 2014 to 1.8%, compared with the same period in 2013.
Commentary
The manufacturing sector continued to rebound, posting a 4.6% increase in the third quarter. The US economic recovery, combined with the drop in the loonie, makes it easier to land new contracts and develop new markets; this trend will continue in 2015. The services sector gained ground with an annual growth rate of 1.7% in the third quarter; all of its components were up except for the commercial sub-sector (‑0.6%). Meanwhile, the construction industry fell by 2.3% in the third quarter. A strong performance by the residential sub-sector, which posted a 37.7% increase in housing starts, was not enough to offset the poor showing of new large-scale non-residential projects. It should be noted that the construction industry will show fresh signs of growth beginning in 2015 as all eyes will be on the return of major residential, institutional, commercial and road projects.
The results for the first nine months of 2014 support our forecast of 2.0% real GDP growth in the Quebec City CMA for the full year. The manufacturing sector, which is expected to put an end to seven years of consecutive decreases, should also be a contributing factor.
Louis Gagnon
Senior Economist
Québec International
