Québec, December 21, 2017. – Québec’s gross domestic product at market prices was up 1.1% in real terms in the third quarter of 2017, an annualized increase of 4.3%. In Canada, GDP increased 0.4% in the third quarter (+1.7% on an annualized basis). After nine months, GDP growth was 2.9% higher compared with the same period last year in both Québec and Canada. That was revealed in Comptes économiques du Québec, 3e trimestre 2017, a publication of the Institut de la statistique du Québec.
Final domestic demand grows, boosted by business investment
Final domestic demand rose 1.1% in the third quarter of 2017, continuing its upward trend that began at the start of the second half of 2015. Final consumption expenditure increased (+0.7%), with government spending posting stronger growth (+1.0%) than household spending (+0.6%). Gross fixed capital formation was up 2.7%, supported more by business investment (+3.0%) than by government investment (+1.6%).
Spending on services (+0.9%) contributed more to the increase in household final consumption expenditure than spending on goods (+0.2%), a situation that was last observed in the third quarter of 2016. The modest growth in spending on goods was due to a second consecutive decline in semi-durable goods expenditure (-0.3% in the second quarter, -0.9% in the third), and to weak growth in non-durable goods expenditure (+0.3%). Spending on durable goods was up 0.7%.
Business investment in residential buildings experienced an upswing (+3.2%), following a 0.3% decline in the second quarter. This rebound was mainly attributable to new construction (+7.0%), although renovation (+1.0%) and resale activities (+0.8%) were also up. In the non-residential sector, growth was dominated by capitalized machinery and equipment expenses (+6.0%), but was also due in part to investment in construction (+1.4%) and intellectual property products (+1.2%).
Exports were down (-1.3%) on account of a decline in international exports of goods
(-3.7%). Imports also decreased (-0.5%), but not as sharply, resulting in a deterioration in the external trade balance, which stood at -$18.0 billion in the third quarter of 2017.
Gross domestic product by industry up in September
Québec’s real gross domestic product (GDP) at basic prices edged up 0.1% in September 2017 after a 0.7% drop in August. In Canada, GDP rose 0.2% in September. Goods-producing industries were behind Québec’s growth: they posted 0.8% in gains, while service-producing industries recorded a drop of 0.2%.
In September 2017, goods-producing industries recorded a 0.8% increase, following a 1.9% decline in August. Output was up in construction (+2.2%), utilities (+2.5%), as well as in mining, quarrying, and oil and gas extraction (+2.7%). Agriculture, forestry, fishing and hunting (-0.9%) and manufacturing (-0.3%) posted declines.
Service-producing industries were down for the second consecutive month, decreasing 0.2% in September, after 20 months of uninterrupted growth that ended in July. Several sectors posted declines in September, including wholesale trade (-2.3%), retail trade (-1.6%), finance and insurance (-0.3%), administrative and support, waste management and remediation services (-0.8%), and arts, entertainment and recreation (-1.5%). However, output was up in educational services (+1.0%).
Output in the manufacturing sector declined for the second consecutive month, down 0.3% in September following a 1.8% drop in August. The decrease in September was attributable to both non-durable goods manufacturing (-0.4%) and durable goods manufacturing (-0.3%).
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