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Desjardins Leading Index

The DLI Is Picking Up: Does This Mean Quebec’s Economy Is About to Bounce Back?

May 2, 2024
Hélène Bégin
Principal Economist


  • The DLI is up for the second month in a row, and February’s 0.7% gain is much stronger than the 0.1% increase recorded in January.
  • This solid performance was driven by the DLI’s business and household components, which are now back in positive territory after several monthly declines last year. The components were given a boost from business and consumer sentiment in the province, which have been on the rise for a few months now.
  • Some statistics in the residential market have improved, particularly for existing home sales and new construction. This allowed the housing component to post a much smaller decrease than in previous months.
  • The DLI recovery seems to be underway, which could point to a rebound by Quebec’s economy over the coming months.
  • In the past, the DLI was able to successfully predict most turning points in Quebec’s real GDP External link., three to six months in advance. The sudden recession caused by the pandemic in 2020 was one of the rare exceptions.


The DLI’s gradual turnaround after a long period of weakness is encouraging. If its upward trend continues for a few more months, it will be a more convincing sign of Quebec’s upcoming economic recovery.


Last year, the province was hit hard, with real GDP falling for three consecutive quarters. Two consecutive quarters of real GDP contraction doesn’t necessarily mean there’s a recession External link.. Recessions also require a significant, persistent and widespread slowdown of economic activity. Barring an unexpected relapse, the current cycle hit its lowest point in late 2023. More specifically, economic activity fell over 10 months, dropping 1.9% from its peak in February 2023 to its trough in December.


While Quebec’s real GDP experienced short-term disruptions from November to January, caused by strikes in healthcare and education, the economy had actually been contracting since early 2023.


In January, real GDP External link. recovered for most sectors, which is certainly encouraging to see. What’s more, the DLI seems to have stopped its slide, suggesting that the economy might pick back up in the coming months. All the same, we’re not out of the woods yet. The real recovery should begin in the second half of 2024, after the Bank of Canada begins cutting its key rate. For more details, see our most recent forecasts External link..

The Desjardins Leading Index is a composite index that allows market players to monitor shifts in Quebec’s economy that may indicate an imminent slowdown, recession or recovery in the next six months or so. NOTE TO READERS: The letters k, M and B are used in texts, graphs 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. Data on prices and margins is 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. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.