The Quebec economy contracted more markedly in the second quarter than the Canadian economy as a whole, the Quebec Statistics Institute (ISQ) indicated on Tuesday.
Quebec’s real gross domestic product (GDP) at current prices decreased by 0.5% compared to the previous quarter, which saw it increase by 0.3%. On an annualized basis, the decline in the second quarter was 1.9%.
The economic contraction in the second quarter is notably attributable to a decline in investment spending, a slowdown in inventory accumulation and a reduction in final consumption expenditure, explained the ISQ in a press release. This decline was mitigated by an improvement in the trade balance.
Investment spending fell 2.4%, recording a fifth straight quarterly decline. Business investments in residential buildings, which fell by 5.8% compared to the first quarter, particularly explained this decline. Investments by other types of businesses also fell, but less markedly, and those of public administrations increased by 0.2%, said the ISQ.
A slowdown in inventory growth contributed to the decline in GDP growth in the second quarter, while final consumption expenditure fell 0.2%. In addition, household final consumption expenditure fell by 0.5%. Among these, spending on services fell 0.7%, while spending on goods fell 0.3%.
In Canada, the economy appeared to stagnate in the second quarter as housing investment continued to decline, driven by a drop in the number of new constructions. The economy contracted at an annualized rate of 0.2% for the period from April to June, Statistics Canada said in a report released on 1er September, a lower rate than experts had expected.