2024-08-07 05:13:09
Economists at Mouvement Desjardins said in a report released Tuesday that Quebec’s economy “regained momentum” by mid-year after several difficult quarters.
That contrasts with investor concerns about the strength of the U.S. economy, which have driven U.S. stocks lower in recent weeks.
The findings of the Quebec agency’s experts come from the monthly update of the Desjardins Precursor Index (DPI) of the Quebec economy, which compiles the latest statistics on the economy and the small and medium-sized enterprise sector.
In May (the latest month for which data is available), the IPD rose 0.5% for the second consecutive month.
Photo courtesy of DESJARDINS
Hélène Bégin, Senior Economist, Desjardins Bank
Almost all statistics in the IPD point upward, suggesting that Quebec’s economy will see fairly broad-based growth in the coming months.
Latest analysis of the Leading Index by Hélène Bégin, Senior Economist at Desjardins
“The encouraging developments in the IPD are consistent with the significant progress made by the Quebec economy in recent months,” said Mr.I start.
“The period of decline in economic activity that occurred from the spring of 2023 to the end of last year is now a thing of the past. According to the latest results [produit intérieur brut] The economic recovery period has now ended and a new expansion cycle is beginning. »
What are the main factors behind Quebec’s economic “rebound”?
Household spending rebounds
The “remarkable” recovery in the IPD component related to the economic situation of Quebec households bodes well for total consumer spending in the coming months. In particular, we highlight the rebound in sales of “major durable goods such as motor vehicles, furniture, and household appliances” after a difficult period for many consumers.
Recovery in the residential sector
The real estate sector of the Desjardins Leading Index has been accelerating in recent months and has now returned to “very solid” levels. Economist Hélène Bégin said, “Since the beginning of 2024, the recovery of the Quebec residential sector has been well underway, thanks to the growth in existing property sales and the recovery in residential construction.” Looking ahead, “the interest rate cuts that have begun in Canada will provide a second impetus to the recovery of the housing market in the coming quarters.”
SMEs regain confidence
Desjardins senior economist noted that among the components of the leading index related to the business sector, “some indicators are improving” after a difficult period. In particular, Hélène Bégin pointed out that ” [dirigeants de] Although still relatively low from a historical perspective, the PME is recovering. Rising confidence among small and medium-sized enterprises sends a more positive signal about the economic outlook.”
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