Desjardins reports bright outlook for Quebec's economy and real estate
Quebec’s economic recovery period is now over, setting the stage for further growth in the housing market, according to Desjardins.
The Desjardins Leading Index (DLI), a composite indicator that monitors shifts in Quebec’s economy, rose 0.5% for the second consecutive month in May. This increase suggests a positive economic outlook for the province over the next six months.
“There are clear signs that Quebec’s economy is back on track, and real GDP also returned to growth in the first half of 2024,” Desjardins principal economist Hélène Bégin wrote in the report.
The DLI’s household component, which effectively forecasts trends in total consumer spending, surged by 2.2% in May. Similarly, the housing component has been on a positive trajectory for several months, climbing 1.7% in May.
“The housing market also improved thanks to a rebound in existing home sales and the ongoing recovery in residential building construction,” Bégin said. “Now that the Bank of Canada has started cutting interest rates and should continue easing its monetary policy this year and next, we expect Quebec’s economy and residential real estate market to improve further in the coming quarters.”
According to the latest real GDP data, Quebec has transitioned from a recovery period to a new expansion cycle. Desjardins pointed out that the economic downturn that began in spring 2023 and lasted until the end of the year has ended.
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The DLI had predicted Quebec’s economic recovery a few months in advance, and recent developments confirm a positive short-term economic outlook for the province.
However, the DLI’s business component has declined recently. Business conditions remain challenging, according to the Institut de la statistique du Québec, although indicators such as SME confidence are showing improvement, indicating a more optimistic future.
“In short, the recent DLI trend is encouraging and in line with Quebec’s remarkable progress over the past few months,” the report concluded.
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