Moderate increase of Québec gross domestic product in first quarter

Québec, June 27, 2014 – Gross domestic product at market prices rose 0.6% in real terms in the first quarter of 2014, an annualized increase of 2.4% compared to 1.2% for the Canadian economy. Compared to the first quarter of 2013, real GDP grew 1.3% in Québec versus 2.2% in Canada. This was revealed in the Institut de la statistique du Québec publication Comptes économiques du Québec, 1er trimestre 2014.

GDP growth driven by external sector while investment in fixed capital edges down

Final domestic demand was down 0.1% in the first quarter; the 0.6% increase in general governments final consumption expenditure was not enough to offset declines in consumer spending of households (–0.1%) and gross fixed capital formation (–0.9%).

This slight decrease in household consumer spending represents the first decline since the second quarter of 2012, after solid growth throughout 2013. A 0.8% increase in non-durable goods spending did not compensate for the drop in durable goods (–1.9%) and semi-durable goods spending (–1.8%), while services expenditure recorded a low growth rate of 0.2%. Gross fixed capital formation of businesses decreased 1.0%, which represents the fourth decline in five quarters, and gross fixed capital formation of public administration fell back 0.4%—a third decline in four quarters.

Business investment in residential construction fell by 0.5%, due to the construction costs of new housing units which dropped by 3.9%, while renovation activities (+1.9%) and home resale activities (+2.0%) were up. Business investment in non-residential construction decreased by 2.5%, in machinery and equipment, down 2.2%—a fifth consecutive quarterly decline—while business investment in intellectual property was up 1.5%.

In the first quarter of 2014, exports rose (+1.7%) after two consecutive drops, mostly due to international exports of goods (+3.4%), although all components posted gains. Total imports retreated 0.3%, as did imports from other countries (–0.3%), while imports from other provinces dropped 0.2%, a third consecutive decline. A decline in imports combine with growth in exports translated into a slight drop of the external trade deficit, going from $26.3 billion to $23.2 billion.

Sustained increase in monthly GDP by industry

Québec’s real gross domestic product (GDP) at basic prices rose 0.3% in March 2014, following two consecutive increases (+0.4% in February and +0.4% in January). In Canada, GDP rose 0.1% in March. Both major industry sectors were behind Québec’s increase in March, as goods-producing industries recorded a 0.5% rise and service industries increased their activity level by 0.2%. This was revealed in the March 2014 issue of Produit intérieur brut par industrie au Québec, published by the Institut de la statistique du Québec.

The rise in goods-producing industries comes mainly from increases in mining, quarrying, and oil and gas extraction (+4.4%), and manufacturing (+0.7%). Utilities were up 0.3%. However, construction (–0.3%) as well as agriculture, forestry, fishing and hunting (–0.3%) decreased their output level.

As for services, noteworthy gains were recorded in wholesale trade (+1.5%), and arts, entertainment and recreation (+5.5%). Smaller gains were observed in real estate and rental and leasing (+0.3%), health care and social assistance (+0.6%) and public administration (+0.4%). However, output levels decreased in retail trade (–1.0%), professional, scientific and technical services (–0.9%) as well as accommodation and food services (–1.9%).

Output in the manufacturing sector was up 0.7% in March, following three consecutive increases. The rise recorded in March was mostly due to a 1.4% increase in non-durable goods manufacturing. The durable goods manufacturing sector grew by 0.2%. Regarding non-durable goods manufacturing, growth was mostly due to food manufacturing, paper manufacturing, and chemical manufacturing. As for durable goods manufacturing, the increase stemmed mainly from primary metal manufacturing. Meanwhile, several sectors registered decreases, including wood product manufacturing, transportation equipment manufacturing and machinery manufacturing. In March, output levels increased in 7 out of 19 manufacturing sectors.


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Sources:

  • Richard Barbeau
    Economist
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  • Réjean Aubé
    Economist
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