Economic outlook | The slowdown will hurt Montreal less, according to Desjardins

The economic slowdown in Quebec is being felt in Montreal, according to an analysis by Desjardins Movement economists published Friday. Even if slowed down, the region’s economic growth should remain above the provincial average. Overview.

Key forecasts from Desjardins for the Montreal economy in 2024:

Regional GDP growth: +1.4% (+2.9% in 2023 and +9.8% in 2022)

Disposable income per capita: + 3.3% (+ 4.1% in 2023 and + 9% in 2022)

Number of jobs: -0.6% (+1.8% in 2023 and +4.6% in 2022)

Unemployment rate: 7.3% (5.8% in 2023 and 5.7% in 2022)

Residential starts: 6,744 (6,500 in 2023 and 10,436 in 2022)

The job market is softening

According to Desjardins, the “increasingly pronounced” economic slowdown is slowing employment growth in Montreal, and could even cause it to fall into a “slight decrease” in 2024. “The great diversification of the Montreal labor market should, however, reduce the effects of the economic slowdown in the region,” predict Desjardins economists. However, after experiencing a historic low of 5.7% in 2022, the unemployment rate in Montreal should increase to 5.8% for the whole of 2023, and even more in 2024 to exceed the 7 mark. %.

Employment by major sectors

According to Desjardins, the trade and manufacturing sectors “could experience more difficult months as indicated by the drop in activity at the Port of Montreal.” However, “the aeronautical sector should support the manufacturing industry, while Montreal is recognized worldwide as a center of the aerospace industry.” In the construction of buildings, already slowing down since the start of 2023, the decline in hours worked could be accentuated with the drop in activities in all sectors: residential, commercial and institutional. In the health care and social services sector, Desjardins anticipates that “demand for labor should continue to increase, driven by the aging of the population and increased needs for social services.”

The residential market still tense

With the marked drop in residential construction starts, while demand for housing in Montreal remains very strong with “the resumption of immigration and the return of foreign students”, Desjardins economists anticipate that “the downward trend [du taux d’inoccupation des logements locatifs] expected to continue through 2024.” And this, below its level already lowered from 3.1% to only 2.3% over the past year. In the residential property resale market, Desjardins anticipates that the 38% drop in transactions since the start of the year in Montreal could ease over the coming months. Consequently, the impact of this slowdown on sales prices is still expected to be “limited” in the short term.

Strong investments

Good news to mitigate the economic slowdown in the Montreal region: “Strong growth in investments [non résidentiels] are expected as much in the private sector as in the public sector, thanks to the arrival or continuity of numerous infrastructure projects,” note Desjardins economists. Among these major projects, they note the extension of the blue metro line (6.4 billion between 2020 and 2029), the construction of the Metropolitan Express Network (REM, 8 billion between 2018 and 2027), the repair of the Louis-Hippolyte tunnel -La Fontaine (2.5 billion from 2022 to 2025) as well as the reconstruction of the Île-aux-Tourtes bridge on the A40 at the west end of the island of Montreal (2.3 billion from 2023 to 2027).