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Quebec's economic growth to pick up modestly in 2013: RBC Economics

Quebec's economic growth to pick up modestly in 2013: RBC Economics 
TORONTO, March 19, 2013 /CNW/ - With several of the obstacles that restrained 
Quebec's economic growth in 2012 now cleared, the province's economy is poised 
for subtle improvement in 2013, according to the latest RBC Economics 
Provincial Outlook issued today. RBC projects provincial real GDP to 
accelerate to a rate of 1.2 per cent in 2013 from an estimated 0.8 per cent in 
2012. 
"The extended labour disruption in aluminum production, the rise in provincial 
sales tax and months of student protests had a dampening effect on Quebec's 
economic performance in 2012," said Craig Wright, senior vice-president and 
chief economist, RBC. "These obstacles have, for the most part been cleared, 
and we see brighter days ahead, particularly as a result of increasing foreign 
demand for the provinces' products." 
This improved outlook for Quebec's exports is in part predicated on a recovery 
in U.S. housing construction, which should boost demand for 
Quebec-manufactured building materials such as wood products, says RBC. 
Recent data suggests that Quebec's economy started to accelerate in the final 
stages of 2012. The services sector showed signs of strength, with gains in 
both business and household services, including a bounce back in education 
services. The goods sector, however, remained a mixed bag; output by utilities 
increased, construction moderated and manufacturing came to a halt. 
Strong employment gains of nearly 92,000 between August 2012 and January 2013 
in Quebec pushed the unemployment rate to a three-year low of 7.1 per cent in 
January 2013. In addition, RBC expects slightly stronger labour market income 
to support increased consumer spending in 2013. 
"Despite some pockets of improvement, it's important to note that any upside 
to provincial expansion this year will be limited," Wright noted. "After 
substantial increases in Quebec over the last two years, capital investment 
intentions are flattening. This will be the key factor holding back the growth 
rate growth in the province this year." 
Light construction activity at the tail end of last year will slow further in 
2013 and act as a notable drag on growth. The slowdown in home resales since 
last summer will translate to weaker housing starts and residential 
investment, and non-residential capital expenditures will be flat at best in 
2013. 
The RBC Economics Provincial Outlook assesses the provinces according to 
economic growth, employment growth, unemployment rates, retail sales, housing 
starts and consumer price indices. The full report and provincial details are 
available online as of 8 a.m. ET today at 
rbc.com/economics/market/pdf/provfcst.pdf. 
Craig Wright, RBC Economics Research, 416 974-7457 Robert Hogue, RBC Economics 
Research, 416 974-6192 Elyse Lalonde, Communications, RBC Capital Markets, 416 
842-5635 
SOURCE: RBC 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/March2013/19/c5954.html 
CO: RBC
ST: Ontario
NI: FIN ECO ECOSURV  
-0- Mar/19/2013 09:00 GMT