Sectoral Outlook 2012-2014 - Capitale-Nationale Region

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Part 2: Sectoral Outlook

Industrial structure

The industrial structure of the Capitale-Nationale region is in a constant state of flux as it sporadically adjusts to demand from consumers and businesses and to economic and structural changes in the various industries. However, an underlying trend can be seen, namely the growing importance of services. The proportion of regional jobs in the service sector rose from approximately 82% in 1987 to 86% in 2011; in Quebec, the service sector accounted for 79% of total employment. The transition to a service economy is ongoing as production services expand, but also as the manufacturing and primary sectors shrink. This transition is expected to continue, while gradually fading out. The number of manufacturing-related jobs has been steadily declining in recent years, both in the region and in Quebec as a whole: the manufacturing sector accounted for approximately 7% of employment in the region in 2011, compared with 12.3% province-wide. Accelerated public and private investment has boosted the proportion of jobs in the construction industry to 6.4%, which is slightly higher than in Quebec overall (6 %). Primary sector industries accounted for roughly 1% of total employment in the region, whereas in Quebec the number was twice this amount (2.3%).

Outlook

Although the economic outlook remains positive, slower growth is expected.

Although the economic outlook for the Capitale-Nationale region remains positive, slower growth is expected during the forecast period. The population boom will ensure ongoing demand for goods and services; however, weaker growth in the service sector, combined with a more moderate rise in construction, will have an impact on the overall rate of economic growth. The persistent problems in the manufacturing sector will also affect the economic vitality of the region in the short term. Domestic demand, specifically consumer and public spending, will be negatively affected, not only by sluggish growth in personal disposable income but also by government budget cuts. The strength of the Canadian dollar and the uncertain international economic context will not be conducive to an upswing in foreign trade, hence the contribution of foreign trade to GDP will remain limited.

The economic development strategy will focus on continuity

Generally speaking, the region's economic development plans will continue along the same lines. Growth will be supported by a more integrated vision of regional development and increased stakeholder engagement, with a focus on high technology, the knowledge economy and culture. For regional stakeholders, the pursuit of economic diversification also involves the development of entrepreneurship. This direction is in line with the political will of the Government of Quebec to foster business creation through Quebec's entrepreneurship strategy. Another development focus will be innovation and creativity, which will be fostered through the establishment of new technology parks and incubators (digital, applied and life sciences). Targeted trade missions will be pursued with a view to attracting foreign investment and skilled workers and generating economic spinoff for the region. The city of Québec has come up with land-use scenarios that will guide its future development activities. Specific urban plans and the adoption of new regulations will foster the construction of office buildings, housing units (green neighbourhoods) and the development of commercial thoroughfares, with a goal of densification and sustainable development. Finally, the Québec tourist bureau will develop an action plan aimed at making Québec a prime international tourism destination.

Economic growth is expected to generate approximately 8,500 jobs.

In terms of employment, the continued optimism of the business community will boost labour requirements. Attracting and retaining workers, however, remains the primary concern of entrepreneurs, and could pose a barrier to the growth of businesses and employment. Over the next three years, economic growth is expected to generate approximately 8,500 additional jobs. Employment is forecast to grow at an average annual rate of 0.8%, which is close to the expected provincial rate of 0.7%.

The majority of the industry sectors will contribute to labour market growth, with significant input expected from health and social services, professional, scientific and technical services, business services and transportation. Moderate growth is forecast in information, culture and recreation, and accommodation and food services. Growth will be more modest in the construction, trade and education sectors, and the public administration sector will pursue its staff reduction objectives and budget cuts. There will also be job losses in the manufacturing sector.

Table 2 - Breakdown of Employment for Selected Industry Groups

Region: Capitale-Nationale

Industry Average for 2009-2011 2012-2014
Level (thousands) Share of employment Average Annual Growth
Region Region Province Region Province
All Industries 366.9 100.0% 100.0% 0.8% 0.7%
Primary 3.8 1.0% 2.2% 0.0% 0.2%
Manufacturing 26.4 7.2% 13.0% -0.5% 0.2%
Construction 18.7 5.1% 5.8% 0.5% 0.6%
Services 318.0 86.7% 79.0% 0.9% 0.8%
Consumer services 100.8 27.5% 27.3% 0.9% 0.7%
Production services 98.8 26.9% 26.2% 1.2% 1.1%
Public and parapublic services 118.4 32.3% 25.5% 0.6% 0.7%
Source: Service Canada, Quebec Region
Historical estimates based on Statistics Canada's Labour Force Survey