Ottawa, February 14, 2013—Quebec City is expected to lead all five provincial Census Metropolitan Areas in economic growth in 2013. Meanwhile, slight malaise seems to be permeating Montreal’s economy and Trois-Rivières is facing a second straight year of declining output, according to The Conference Board of Canada’s Metropolitan Outlook.

Quebec City’s economy is forecast to grow by 2.1 per cent in 2013, a rank of 15th out of 28 Canadian CMAs covered in the Winter 2013 edition of the outlook. With growth of 1.7 per cent anticipated for 2013, Montreal’s outlook remains modest.

“The good-producing sectors are boosting Quebec City’s economy. The manufacturing sector is forecast to grow this year after shrinking over the previous five years. And the construction sector can look forward to another good year, thanks largely to the new NHL-sized arena,” said Mario Lefebvre, Director, Centre for Municipal Studies. 

The $400-million arena project is the catalyst for a third consecutive year of strong gains in the construction industry – output is forecast to grow by 8.7 per cent in 2013 alone. The reopened White Birch paper mill is the primary reason why the manufacturing sector is expected to post its first increase in production since 2007. However, continued austerity in provincial government spending will hold back the services sector.

“While Quebec City grew by just 1.2 per cent in 2012, Montreal had an even more dismal 2012,” said Lefebvre. “With economic growth of less than one per cent last year, Montreal had its second-worst year in a decade-and-a-half – only recession-plagued 2009 was worse.” 

In the manufacturing sector, decent growth in Montreal’s aerospace industry will be somewhat offset by struggling pharmaceutical firms. Construction will not contribute much growth to the economy until the Champlain Bridge replacement begins in 2015. And Montreal continues to lose people to other parts of Canada, although new arrivals from other countries will maintain housing demand.

Sherbrooke’s real gross domestic product (GDP) growth is forecast to improve to 1.8 per cent in 2013. Although the construction industry outlook remains weak, stronger growth in manufacturing and rising demand for health and education services – key sectors in the CMA – will boost economic activity this year and, in turn, employment.

Downsizing in the federal government is taking its toll on Ottawa-Gatineau’s economy, which straddles the Quebec-Ontario border. Government is the largest industry in the CMA, and public sector employment is expected to fall for the next three years – including a 3.8 per cent decline this year. Real GDP growth will be limited to 1.3 per cent this year.

Although Saguenay’s real GDP rose modestly in 2012, it marked the CMA’s third consecutive year of growth. As a result of three years of economic gains, employment in Saguenay posted a one-year increase of 7.7 per cent. Low interest rates and modest population gains brought housing starts to a 21-year high. This surge in housing and employment will end in 2013, and Saguenay’s real GDP is forecast to grow by 1.1 per cent.

The provincial government’s decision to cancel the $2-billion Gentilly-2 nuclear reactor refurbishment and close the facility is a shock to the economy of Trois-Rivieres. Real GDP fell by 1.1 per cent 2012 and is forecast to decline by a further 0.6 per cent in 2013. In addition, population is not expected to grow at all over the five-year forecast, which does not bode well for the area`s domestic demand and housing market.

Nationally, Saskatoon and Regina will generate the strongest growth among the 28 CMAs covered in this outlook, followed by Calgary, Edmonton and Vancouver.