Next year “difficult” for the Quebec economy, anticipates the AMF
“The year 2024 promises to be more difficult for the Quebec economy,” anticipate analysts from the Autorité des marchés financiers du Québec (AMF), in their Economic and financial review published Friday.
“The fall in real GDP in the second quarter, which surprised by its magnitude, seems to indicate that Quebec is starting to exhaust the assets that have made its economy relatively resilient in recent quarters,” observe AMF analysts.
Rising borrowing costs as well as the highest inflation in Quebec among all the provinces are eating into the purchasing power of households and curbing demand.
Extract from the Economic and financial review of the AMF
And then ? “The effects of tightening Canadian monetary policy [hausse des taux d’intérêt] have been felt for some time now, but these will be even more noticeable in the months to come,” predict AMF analysts.
“In addition, the slowdown in the global economy means that demand for Quebec products risks decreasing. »
Quebec’s economy on the verge of “contraction”, according to Desjardins
After having “deteriorated abruptly in the second quarter”, the Quebec economy could be “at the start of a period of contraction which would extend until the beginning of 2024”, estimate Desjardins economists in the update of their Economic and financial forecastspublished Thursday.
“The real GDP [au Québec] fell 1.9% [sur un an] in the second quarter following growth of 1.4% in the first quarter,” report Desjardins economists.
In the second quarter, “household consumption expenditure decreased for the first time since the start of the pandemic. Also, the residential sector continued to fall, and business investment declined.”
Therefore, “economic conditions [au Québec] should remain difficult over the coming quarters, particularly due to the restrictive effects of high interest rates,” warn Desjardins economists.
Also, “the job market, which has held up fairly well so far, is expected to deteriorate. The unemployment rate measured at 4.4% in September should rise to around 5.5% by next spring. »
Businesses and consumers in pre-recession, estimates the National Bank
The sentiment of business leaders and consumers towards developments in the economy is deteriorating to a level that is a precursor to recession, estimate National Bank economists in their weekly analysis post published on Friday.
Among other things, in the most recent Business Outlook Survey (EPE) disclosed by the Bank of Canada, National economists note “a deterioration in operating conditions [des entreprises] in the third quarter, while the overall EPE indicator continued to sink below 0, to a level usually associated with periods of recession.
As for consumer sentiment, National economists note in the results of the most recent Survey on consumer expectationsalso carried out by the Bank of Canada, that a majority of consumers (55%) “expect the economy to fall into recession within 12 months, up from the level of 50% measured in the quarter previous “.
Consequently, according to economists at the National Bank, “ambient pessimism and rising interest rates are pushing households to reduce their spending.”
Recession still avoidable, CFIB hopes
Despite the increasing signs of slowdown, a recession could still be avoided in the coming months, predict analysts from the Canadian Federation of Independent Business. CFIB is considered the leading voice for SMEs in the country.
In updating their Business Barometer, published Friday, CFIB analysts note that the observations of SME managers point to “weak growth” in the economy in the third quarter, of the order of barely 0.2% in terms of annualized. (GDP figures for the quarter ended September 30 are expected soon from Statistics Canada.)
On a more optimistic note, the update of the Business Barometer of the CFIB suggests that “GDP growth in the fourth quarter [1er octobre au 31 décembre] could rebound slightly to 1.4%, which could help avoid a recession.
“Although GDP growth is below the historical average of around 2.5%, these forecasts indicate a resilient economy despite the difficult context,” report CFIB analysts.