Non-res volumes to shrink in Quebec next year
Non-residential construction volumes in Quebec are expected to continue to contract in 2016, according to the latest economic outlook released by the Conference Board of Canada.
Following modest growth this year, Quebec’s economy is expected to increase by 2.1 per cent in 2016 and another 2 per cent in 2017, the report forecasts.
“Robust demand south of the border and a Canadian dollar that remains well below parity with its U.S. counterpart will give a boost to Quebec’s exports,” said Marie-Christine Bernard, Associate Director, Provincial Forecast. “Exports are forecast to increase by 3.9 per cent in 2016, and that, in turn, will boost machinery and equipment purchases and non-residential construction.”
The anticipated jump in U.S. demand will give a bump to Quebec’s manufacturing sector, which will see output growth rise from 0.8 per cent in 2015 to 2.9 per cent in 2016.
Subsequently, the increase in manufacturing will boost investment in machinery and equipment by 4.2 per cent next year. However, All-in-all, the Conference Board expects business investment to rebound by a modest 1.9 per cent in 2016 and 2.1 per cent in 2017. However, residential investment will be a drag on growth over the near term as housing starts are not forecast to post positive growth until 2018.
Consumer spending was a key economic driver of growth in 2015 and will continue to support the economy in 2016. With a 2.2 per cent increase in wages and salaries per employee, sound employment growth, and a declining savings rate, retail sales are forecast to advance 3.7 per cent in 2016.