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Quebec loses its economic momentum

The trade war between the United States and Canada will affect all of Quebec’s economic sectors. The city displays the most modest growth forecasts among large Canadian metropolises, with an increase in real GDP limited to 0.2 %, after an increase of 0.5 % in 2024.

This brake stroke is mainly explained by a marked contraction in the goods sector. The decline in activity in manufacturing industries and construction will result in a 0.9 % decrease in overall production.

The manufacturing sector, one of Quebec’s economic pillars, is expected to drop 0.7 %. As for construction, an even more pronounced withdrawal of 2.6 % is expected, due to the little dynamism observed both in the residential and in the non -residential.

“We expect the disturbances of exchanges, in particular the customs tariffs on steel, aluminum as well as automobile parts and products not in accordance with the Canada-United States-Mexico agreement, weigh heavily on the performance of the sector in 2025”, underlines the economist Loubna Zebiri in his report.

The labor market in decline

Employment in the region will also undergo the counterpouss of the rights imposed on Quebec aluminum exported to the United States, from 25 % to 50 %.

According to forecasts, the labor market in Quebec will record a degradation of 1 % in 2025 – a first for more than 10 years, if the pandemic period has been excluded.

The losses will be particularly heavy in the goods sector, where there is a reduction of 4.8 % of the workforce.

On the construction side, the absence of major projects will lead to a reduction in employment of 3.6 %. The service sector will also have a decline, with a drop of 0.8 % expected in 2025, after anemic growth in 2024.

Despite this contraction, the unemployment rate in Quebec will remain one of the lower in the country, at 3.1 % in 2025. This low rate is explained by a net slowdown in population growth, itself attributable to the recent reduction of international immigration targets.

“It is expected that population growth in the region will slow down 0.7 % in 2025, down sharply compared to the gain of 2.5 % recorded in 2024,” said the report.

Economic resumption, but demographic slowdown

The Conference Board of Canada, however, plans that the Trump administration will eventually raise the prices. Their withdrawal would allow manufacturing production to increase an average of 3.2 % per year between 2026 and 2029. During the same period, real GDP should increase by 1.4 % on average each year.

Despite this upturn, the resumption of employment will remain modest, with an annual growth estimated at only 0.4 % from 2026 to 2029. The unemployment rate would stabilize at 3 % by the end of the period.

The activity rate would drop from 65.6 % in 2025 to 64.9 % in 2029, reflecting both the aging of the population and persistent restrictions on international immigration.

For the first time since this data is counted, the international migration balance will become negative from 2025 to 2027, with a cumulative loss of around 3190 people.

However, if the federal government ends the immigration cap in 2027 as expected, the migratory balance should go back to positive territory and reach around 2,700 people by 2029.

aspen.coleman
aspen.coleman
Aspen climbs Colorado fourteeners with scientists to report altitude-medicine breakthroughs firsthand.
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