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Real GDP Down 0.1% In August

ByThe National Bank of Canada
Published 11/25/2012, 04:39 AM
Updated 05/14/2017, 06:45 AM
NUMBERS:

The Institut de la statistique du Québec re ports that Quebec real GDP at basic prices edged down 0.1% in August, the same as for Canada as a whole. The retreat follows a 0.3% advance in July (top chart). It was due to a 1.2% decline in goods production, led by a 2.2% drop in manufacturing output that erased the July gain. Metal products output (−14.9% in August after +11.9% in July) was a major contributor to the swing.

Residential construction fell a sharp 1.7% for a second consecutive month. Services output, on the other hand, rose 0.3%, thanks in large part to a 3.6% gain in education services. Wholesale trade was also up (0.9%), offsetting a 0.3% decline in finance, insurance and real estate and leasing services. Retail trade was down 0.6%.
Quebec 0.1% retreat of real GDP in August
24 months of decline in manufacturing output
A sixth consecutive quarter of modest growth
OPINION: August manufacturing output was the weakest in 12 months. In fact, manufacturing has lost steam over the last 24 months (middle chart); most industries of the sector show a decline of output over the period. The lag relative to Canada as a whole is the main reason for the lag of the entire Quebec economy over the two years. It remains to be seen whether the sharp rise of Quebec manufacturing sales September (+4.2%, vs. 0.4% for Canada) is the beginning of a catch-up trend.

As for the jump in education services in August, it may be due to an early return to classes to make up for last spring’s boycott. If so, the August gain in services output is probably a blip. With data now in for two months of Q3, quarterly GDP growth is tracking 1.3% annualized – a sixth quarter of modest economic growth in Quebec.

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