Quebec’s GDP recorded a further decline in August. Barring a rather improbable strong surge in September, Quebec’s entry into recession should be confirmed in the third quarter. At least, we would speak of a technical recession.
Quebec’s real GDP contracted by 0.4% in August compared to the previous month, after experiencing a small increase of 0.1% in July. The Institute of Statistics of Quebec (ISQ) adds that production in goods industries decreased by 0.9% in August, marking a decline for a sixth consecutive month. In the service industry, the level of production contracted by 0.2% in August, reversing July’s 0.2% increase.
As a result, “the province’s GDP is on track to contract for a second consecutive quarter. Indeed, GDP would have to increase by a minimum of 0.6% in September (ignoring possible revisions) to avoid this scenario, which has not happened since March 2022,” write the economists at the National Bank.
Matthieu Arseneau and Alexandra Ducharme, however, hesitate to attach the word “recession” to this scenario. The cooling of the economy is certainly widespread, with activity declining in 11 out of 20 major sectors in the second quarter. But certain temporary phenomena influenced the results during this quarter, including activity in public services. “This sector, which represents approximately 3% of the Quebec economy, plunged to its lowest level since 2012 in August. » Although it is engaged in a downward trend, contractions in electricity production have been particularly pronounced since June, probably due to temporary factors such as colder weather than historical norms and wildfires, point out -they.
“Let us also note the drier temperatures which caused a drop in the level of the reservoirs of several hydroelectric power stations, a phenomenon which forced Hydro-Québec to limit its electricity production (and its exports). » National economists add that excluding this industry, Quebec’s GDP shows an annualized increase of 0.5% after two months in the third quarter.
Cumulatively, after eight months, Quebec’s real GDP shows an increase of 0.4% compared to the same months of 2022, specifies the ISQ.