ECONOMIC STUDIES | NOVEMBER 4, 2020
ECONOMIC VIEWPOINT Overview of Quebec’s Capital Regions for 2020–2021
In the capital regions, economic growth will undergo a downturn GRAPH 1 in 2020 due to the current pandemic, as it will for Quebec as a The capital regions will see slightly faster growth in 2021 than whole. As shown in graph 1, the two regions will contract slightly Quebec as a whole 2020f 2021f less than the province as a whole in 2020; the rebound anticipated in 2021 should be slightly stronger. The somewhat better outlooks Quebec as a whole -4.8 6.3 stem from their industrial structure: the weight of the public service gave their economies good stability. Both regions feature large Outaouais -4.7 6.4 service sectors, which allowed more businesses to work remotely.
However, the economic rebound expected for 2021 could be Capitale-Nationale -4.4 7.0 downgraded if the pandemic’s second wave leads to tougher -6 -5 -4 -3 -2 5 6 7 8 restrictions. This is currently the greatest risk to the forecast scenario. Ann. var. in % Ann. var. in % The COVID‑19 crisis is still affecting many countries and uncertainty f: Desjardins forecasts Source: Desjardins, Economic Studies remains elevated.
MAP 1 Quebec’s regions
Nord-du-Québec Côte-Nord
Saguenay– Lac-Saint-Jean Gaspésie– Îles-de-la-Madeleine Abitibi- Bas- Témiscamingue Mauricie 1 – Resource regions Saint-Laurent Lanaudière Capitale- 2 – Manufacturing regions Laurentides Nationale 3 – Urban regions Outaouais Chaudière- 4 – Capital regions A - Laval Appalaches D B - Montréal C - Montérégie C A Estrie D - Centre-du-Québec B
Source: Desjardins, Economic Studies
François Dupuis, Vice-President and Chief Economist • Mathieu D’Anjou, Deputy Chief Economist • Chantal Routhier, Senior Economist Desjardins, Economic Studies: 418‑835‑2450 or 1 866‑835‑8444, ext. 5562450 • [email protected] • desjardins.com/economics
NOTE TO READERS: The letters k, M and B are used in texts and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. The data on prices or margins are provided for information purposes and may be modified at any time, based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. The opinions and forecasts contained herein are, unless otherwise indicated, those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group. Copyright © 2020, Desjardins Group. All rights reserved. ECONOMIC STUDIES
Population Growth Will Remain Fairly Sustained Based on the projections of the Institut de la statistique du Québec (ISQ), population growth will be slightly weaker in the Capitale-Nationale in 2020 and 2021 than in the previous two Replacement index In % years, and will be about the same in Outaouais (graph 2). The 115 110 Labour replacement 109 107 Outaouais will remain ahead of the provincial average. It will even index: 105 20-29 years x 100 have one of the strongest paces of Quebec’s regions. 55-64 years 95 88 86 84 84 85 83 77 GRAPH 2 75 Population growth will remain relatively sustained 2006 2016 2021f
Average 2018-2019 Average 2020f-2021f Quebec as a whole Capitale-Nationale Outaouais
Quebec as a whole 0.94 0.67 f: Institut de la statistique du Québec projections, based on the baseline scenario for 2019 Sources: Institut de la statistique du Québec and Desjardins, Economic Studies
Capitale-Nationale 0.75 0.64 pressure on the labour market by narrowing the gap between labour supply and demand.
Outaouais 0.85 0.80 For example, the Outaouais index will be at 77% in 2021. In other words, for each group of 100 people who leave the labour 0.0 0.5 1.0 1.5 0.0 0.5 1.0 1.5 Ann. var. in % Ann. var. in % market, there will be 77 people who are of age to replace them. f: Institut de la statistique du Québec projections, based on the baseline scenario for 2019 The index has declined 33 points since 2006. Sources: Institut de la statistique du Québec and Desjardins, Economic Studies Employment Markets Strengthen For both regions, migration (arrivals minus departures) will be The Capitale-Nationale and Outaouais regions benefited from primarily responsible for population growth from now until 2021, the heavy presence of the public sector to lessen the pandemic as the contribution from natural growth (births minus deaths) shock to their respective economic activities. Employment will shrink. In addition, a brief look at interregional migration nonetheless dropped and unemployment rates soared to historic shows that the capital regions remain attractive, particularly for highs in the spring after having trended down (graphs 5 and 6 Montréal and Montérégie residents (graph 3). on page 3).
At the same time, like elsewhere in Quebec, these regions must In the Outaouais, the employment market is gradually deal with the challenge of replacing workers (graph 4). Their recouping the lost ground, but it will take some time‑perhaps labour replacement indexes have been declining for several years several quarters‑to return to pre‑crisis levels. For its part, the now, which means there aren’t enough people to fill all the Capitale‑Nationale has already recovered, and has even exceeded positions left vacant by retirements. In fact, for every 100 people the level of employment that prevailed prior to the public health who retire (aged 55 to 64), there are fewer than 100 people old and economic crisis. enough to enter of labour market (aged 20 to 29). This is putting Among the key economic drivers for the capital regions are education, health care and social services, the finance and GRAPH 3 insurance industry, real estate and leasing services, lumber and Interregional migration of resource regions in 2018–2019 paper manufacturing, and the retail trade industry. For many municipalities around the major Quebec City and Gatineau centres, agriculture and forestry are important economic Breakdown of in- Breakdown of out- activities. The speed of the recovery will vary by sector (graph 7). migrants based on the migrants based on the REGIONS three main regions of three main destination origin regions Tourism is an economic pillar in both regions; the pandemic has
1) Chaudière-Appalaches 1 ) Chaudière-Appalaches slowed activities and it will take some time for the industry to Capitale- 2) Montréal 2) Montréal Nationale turn around. This could hurt many businesses which will struggle 3) Montérégie 3) Montérégie to recover. However, Quebecers have been more drawn to 1) Montréal 1 ) Montréal Outaouais 2) Montérégie 2) Laurentides resorts and vacations in nature. A number of municipalities have 3) Laurentides 3) Montérégie therefore fared well despite the current situation.
Sources: Institut de la statistique du Québec and Desjardins, Economic Studies
NOVEMBER 4, 2020 | ECONOMIC VIEWPOINT 2 ECONOMIC STUDIES