In the most recent past, the economy in Quebec was being held back primarily by a weakened export industry and frail investments in business. The Finance Minister of the province indicated that he will take the necessary steps allowed by the government to try to improve the situation, if it continues. Since the previous governor of the Bank of Canada, Mr. Carney made accusations in 2012 about Corporate Canada not using the piles of money it had to improve the economy in order to create jobs, nothing seemed to have changed.
Some thought that the accusation made was way out of proportion. The money is considered to still be alive, but the Canadian province is not taking full advantage of it. The National Bank revealed investment data that indicates lower profit levels for 2012 for intellectual property, machine and equipment companies and commercial construction. This appears to be a part of the bigger picture and so economy projections were modified in the month of November.
North American businesses are reluctant to spend in lieu of the slow economy. Quebec, it seems may hold a stronger position in the economic climate to fix their situation since most of the businesses are owned by locals. This means that their money is not controlled by corporate decision makers in other regions.
For 2015, it is projected by the government that Quebec will put up 1.5% in economic growth. This is a reduction compared to past prediction of 2%. The forecast for 2016 shows a slight increase of 1.7%. The government is not pleased with the sluggish export business, even though; it is doing better than other areas. Quebec depends on export and so due to the drop in the Canadian dollar, it is hoped that Quebec will ship high volumes of paper and metal products to American buyers looking for a cheaper price. However, this is not the case – at least not yet.
Quebec went through an extended period of recovery from the recession of 2008-2009. The United States is still the leading market for the goods exported from Quebec. In fact, the United States takes in three quarters of everything. The recession caused major damage to the industrial framework. Many industrial plants closed their doors for good. For that reason, even though, the cycle is showing some progress, Quebec is not able to carry it due to the loss of capacity in the industrial arena.
In 2014, Quebec’s international exports reached $75 billion in Canadian dollars. This does not include sales from foreign affiliates and service exports. A forecast has been made by export development that merchandise trade in Quebec will be increased to 10% in 2015 and 8% in the subsequent year 2016. Aerospace product shipments will lead the projection with primary exporters providing engines and production of the innovative C Series airliner.
The primary players know that they have to stay abreast of things and not be naïve about it by continuing to find supportive ways to push for new business investments. If not, a large hole will be left in the economy as businesses compete for the same assets.