Quebec: Real GDP Edges Lower in July After Reaching a Record High in June

July’s slight decline should be put into perspective. It followed a 0.5% jump in June that had pushed Quebec’s real GDP to a new record high. Despite some volatility in recent months, economic activity has remained close to the peak reached before the trade conflict began.

The composition of activity was also fairly reassuring. Goods-producing industries expanded for a second consecutive month, led by manufacturing and construction. Weakness was instead concentrated in services, particularly wholesale trade. Accommodation and food services nevertheless stood out with a 2.2% gain, as domestic tourism External link. continues to support activity.

The picture since the beginning of the year nevertheless remains one of an economy moving forward slowly. The cumulative 0.3% increase masks lingering weakness in manufacturing, where activity remains 1.9% below its level in the first seven months of 2025, as well as a 1.0% decline in public administration. Fiscal consolidation efforts already underway are also expected to continue. The new government External link. is targeting a return to a balanced budget by 2028-2029, one year ahead of the legislated deadline, which should continue to limit the public sector’s contribution to economic growth.

The July data therefore do not fundamentally change our assessment of Quebec’s economy. Growth remains modest, but the economy has so far shown resilience in the face of trade tensions, consistent with the scenario outlined in our latest Economic and Financial Outlook External link..

Caution is nevertheless warranted. The GDP data predate the renewed escalation in trade tensions observed since then, which has come alongside several months of weakness in the labour market External link.. Despite these headwinds, today’s release remains consistent with our forecast for real GDP growth of 0.4% in 2026.