Slight increase of Québec gross domestic product in second quarter

Québec, September 26, 2014 – Gross domestic product at market prices rose 0.2% in real terms in the second quarter of 2014, an annualized increase of 0.7% versus 3.1% for the Canadian economy. Compared with the first half of 2013, real GDP grew 1.4% in Québec and 2.3% in Canada. This is revealed in Comptes économiques du Québec, 2e trimestre 2014

Weak growth was mainly due to smaller inventory accumulation compared with the previous quarter, as final domestic demand recovered (+0.5%) after dropping in the first quarter (-0.2%), and higher exports contributed positively to GDP growth for the second consecutive quarter.

Household final consumption expenditure grew 0.5% in the second quarter of 2014, following a 0.2% decline in the previous one. Growth was primarily attributable to goods expenditure (+0.8%) and, to a lesser extent, services expenditure (+0.3%). Most notably, durable goods expenditure (+1.8%) an semi-durable goods expenditure (+2.4%) rebounded after declines of 1.7% and 2.4%, while expenditure in non-durable goods decreased by 0.2%, after rising 0.7% in the first quarter.

Business investment (+0.6%) and public administration investment (+1.0%) rebounded after having decreased for two quarters. Business investment in residential construction increased by 1.0% due to renovation activities (+2.3%) and ownership transfer cost (+ 0.8%), since new housing construction (-0.7%) decreased for a third quarter in a row. Business investment in non-residential construction (-1.1%) edged down for a third consecutive quarter, while business investment in machinery and equipment grew by 1.2% following decreases since the beginning of 2013. Business expenditure in intellectual property posted a 1.3% increase after dropping 0.1% in the first quarter of 2014.

Total exports of goods and services (+3.5%) increased for the second consecutive quarter and more quickly compared with the 2.2% increase of the first quarter. International exports (+6.4%) posted good results, especially regarding goods exports (+7.4%). Total imports of goods and services climbed 2.4% after retreating over the previous three quarters. All goods sectors were on the rise in the second quarter. Given that exports growth rate was higher than that of imports, the external trade deficit declined by $1.1 billion due to the fact that the international trade deficit decreased by $2.5 billion since the interprovincial trade surplus dropped by $1.4 billion.

GDP by industry increases 0.4% in June

Québec’s real gross domestic product (GDP) at basic prices edged up 0.4% in June 2014, on the heels of a 0.2% increase in May. In Canada, GDP rose 0.3% in June. The increase in Québec was essentially due to goods-producing industries (+1.2%). Service-producing industries increased their activity level by 0.1%. This was revealed in the June 2014 issue of Produit intérieur brut par industrie au Québec, juin 2014.

The rise in goods-producing industries comes mainly from increases in utilities (+5.8%), construction (+1.5%) and manufacturing (+0.5%). However, mining, quarrying, and oil and gas extraction (-6.1%) and agriculture, forestry, fishing and hunting (-0.3%) decreased their production level.

As for services, gains were recorded in transportation and warehousing services (+0.9%), finance and insurance (+0.5%), real estate and rental and leasing (+0.2%) and educational services (+0.2%). On the other hand, administrative and support, waste management and remediation services (-0.5%), health care and social assistance (-0.2%), arts, entertainment and recreation
(-1.5%) and accommodation and food services (-0.7%) decreased their production level.

Production in the manufacturing sector rose 0.5% in June after two consecutive drops (-0.2% in May, -1.1% in April). The rise recorded in June was mostly due to a 0.6% increase in durable goods manufacturing. Non-durable goods manufacturing increased production by 0.3%. In June, output levels increased in 11 out of 19 manufacturing sectors.


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Sources:

  • Richard Barbeau
    Economist
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  • Réjean Aubé
    Economist
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  • Sylvain Carrier
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