Moderate increase of Québec gross domestic product in first quarter

Québec, June 26, 2015 – Gross domestic product at market prices rose 0.4% in real terms in the first quarter 2015, an annualized increase of 1.6% compared to a 0.6% decline for the Canadian economy. Compared to the first quarter 2014, real GDP grew 1.5% in Québec versus 2.1% in Canada. These figures are reported in Comptes économiques du Québec, 1er trimestre 2015 published by the Institut de la statistique du Québec.

GDP growth driven by external sector while investment in fixed capital declines

Final domestic demand was stable in the first quarter, as the 0.4% increase in household final consumption expenditure was offset by the declines recorded in government consumption expenditure (-0.3%) and gross fixed capital formation (-0.9%).

This was the fourth consecutive increase in household consumption expenditure. A 1.5% increase in spending on non-durable goods more than compensated for the drop in spending on durable goods (-1.2%) and semi-durable goods (-0.1%), while spending on services saw growth (+0.3%). Gross fixed capital formation of businesses decreased 1.0%, which represents the third consecutive decline, and that of governments fell back 0.7%—the fourth decline in five quarters.

Business investment in residential construction fell 0.2% due to a 4.7% drop in new housing construction, while renovation activities (+3.0%) remained strong and home resale activities (+0.7%) registered growth. Business investment in non-residential construction declined by 2.4%. Business investment in machinery and equipment was down 1.7%, while that in intellectual property edged down 0.5%.

In the first quarter 2015, exports shrank (-2.9%) after four consecutive increases, solely due to international exports of goods (-7.2%), as all other components posted gains. Total imports contracted 3.2%—imports from other countries dropped by 3.8% and those from other provinces by 2.0%. The improvement in the interprovincial trade balance outweighed the deterioration in the international trade balance, and the external trade deficit decreased from $18.4 billion to $17.5 billion.

Slight decline in monthly GDP by industry

Québec’s real gross domestic product (GDP) at basic prices was down 0.1% in March 2015 after a stagnation in February and a 0.3% increase in January. In Canada, GDP was down 0.2% in March. Goods-producing industries were behind Québec’s decline, as they posted a 0.7% drop, while services-producing industries increased their output by 0.2%. This was revealed in the March 2015 issue of Produit intérieur brut par industrie au Québec published by the Institut de la statistique du Québec.

The decline recorded by goods-producing industries was essentially due to losses in utilities (-5.0%) and construction (-1.1%). Output also decreased in mining, quarrying, and oil and gas extraction (-1.6%). However, manufacturing output rose 0.9%.

As for services, gains were recorded in retail trade (+0.5%) transportation and warehousing services (+1.3%), finance and insurance (+0.5%), and real estate and rental and leasing (+0.2%). However, output levels decreased in professional, scientific and technical services (-0.5%), educational services (-0.2%) as well as accommodation and food services (-0.8%).

Output in the manufacturing sector rose 0.9% in March, after declining 1.9% in February. Non-durable goods manufacturing increased by 0.4% while durable goods manufacturing rose 1.4%. Regarding non-durable goods manufacturing, growth was mostly due to food and chemical manufacturing. As for durable goods manufacturing, the increase stemmed mainly from primary metal manufacturing. However, metal product manufacturing declined.


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Sources:

  • Jean-François Fortin
    Economist
    Phone: 418-691-2411, Ext. 3175
  • Réjean Aubé
    Economist
    Phone: 418-691-2411, Ext. 3142

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