Quebec's housing market is bearing the brunt of the steady increase in interest rates over the past year- and-a-half which the Bank of Canada is using to try and cool inflation, currently at +4.0%, well above its +2.0% target. Since the beginning of this
Quebec’s housing market is bearing the brunt of the steady increase in interest rates over the past year- and-a-half which the Bank of Canada is using to try and cool inflation, currently at +4.0%, well above its +2.0% target. Since the beginning of this year, sales of existing homes in the province have retreated by -18%.
The -27% drop in the volume of residential building permits issued during the last eight months suggests housing starts this year will total in the range of 38,000 to 41,000 units. Also, the year-to-date drop in the inflow of permanent residents will serve to depress housing starts through much of 2024, along with the lingering impacts of high-interest rates and an acute shortage of skilled labour.
Looking ahead, mounting headwinds in the U.S., plus dimming prospects for the Chinese economy, are likely to limit the contribution that exports make to Quebec’s growth over the next 12 to 18 months.Consistent with the retreat in residential construction and the above-noted slowdown in exports, the Canadian Federation of Independent Business recently reported that full-time staffing plans in Quebec have weakened since mid-year. Also, after hitting a high of 6.
According to the Conference Board in Canada, consumer confidence in Quebec notched up slightly to 98 in July after hitting a six-month low of 88 in June. However, a closer look at the details of the report reveals that the share of respondents expecting more jobs and more spending declined compared to the previous month. Based on this report, we expect consumer spending to remain depressed well into 2024.
Across major industrial sectors, above-average gains in spending are projected to occur in manufacturing , public administration , and utilities . Major capital projects on the drawing boards in Quebec include: the Third Link between Quebec and Levis and the Quebec Levis Tunnel; the modernization of the Maisonneuve-Rosemont Hospital; and the Gatineau Light Rail System connection to the Ottawa Rapid Transit Network.
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