Quebec's economic growth slowing: RBC forecasts
Manufacturing sector holding up despite challenges
MONTREAL, October 13, 2006 — Quebec's economy
is expected to grow by two per cent in 2006 and 2.1 per cent
in 2007, according to the latest provincial economic outlook
released today by RBC.
According to the RBC report, high energy prices, a strong
Canadian currency, the rise of China and India's manufacturing
sectors and a slowing U.S. economy all present challenges
to Quebec's economic growth. Despite these downward pressures,
Quebec's manufacturing sector is holding up with manufacturing
shipments up about four per cent on a year-to date basis.
"Quebec's economic growth continues to underperform
relative to the national average with growth coming in around
two per cent for 2006 and 2007," said Craig Wright, vice-president
and chief economist, RBC. "Several factors are weighing
down Quebec's growth and while the province's housing markets
cool, its diverse manufacturing mix is expected to remain
healthier than Ontario's."
RBC notes that while job shedding and plant closures have
hit hard in certain regions of Quebec, its manufacturing backbone
is still in place. Textiles, clothing, and wood product manufacturers
continue to be squeezed by low-cost competitors, but shipments
at other manufacturers such as primary metals, chemicals,
and machinery are up for the year as a whole. "Indeed,
across most major types of manufacturing, Quebec is holding
up better than neighbouring Ontario," said Wright.
"As commodities and the dollar pull-back over the next
year, manufacturers should be able to put the worst behind
them as exports begin a modest rebound by 2008," added
Wright.
For the overall Canadian economy, RBC has revised its 2006
growth forecasts downward with Ontario being sharply downgraded
to last place among the provinces. Alberta and British Columbia
are now in first and second place respectively, bumping Newfoundland
and Labrador to third place for growth in 2006.
The RBC Economics Provincial Outlook assesses the
provinces according to economic growth, employment growth,
unemployment rates, personal income growth, retail sales,
housing starts and the Consumer Price Index.
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For more information contact:
Craig Wright, RBC Economics, (416) 974-7457
Derek Holt, RBC Economics, (416) 974-6192
Raymond Chouinard, RBC Media Relations,
(514) 874-6556
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