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Economic News

Quebec: GDP Makes a Cautious Return to Growth

October 28, 2025
Sonny Scarfone
Principal Economist

Highlights

  • Quebec’s real GDP posted its first gain since March, edging up 0.1% in July—a rebound weaker than that observed in Canada External link. (+0.2%). Cumulatively, GDP is up 1.0% compared to the first seven months of 2024.
  • Gains in goods-producing sectors (+0.8%) offset the decline in services (-0.1%). Mining extraction (+9.2%) led the way, followed by utilities (+2.8%) and construction (+0.8%), together adding 0.24 percentage points to Quebec’s GDP growth.
  • Arts, entertainment and recreation (-2.7%) and wholesale trade (-1.6%) were among the sectors that weighed on July’s GDP. Manufacturing (-0.4%) recorded a fourth straight decline, bringing its cumulative drop to 2% from a year earlier.

Comments

The second half of the year opened with a modest rebound in real GDP, leaving output roughly in line with levels seen at this time last year (graph).

The details reveal several key trends. Utilities, primarily linked in Quebec to electricity production, transmission and distribution, returned to solid growth, posting a cumulative 3.4% increase in 2025 after spring setbacks. Retail trade, buoyed by resilient consumer spending External link. despite household pessimism, slipped slightly in July, and high-frequency indicators suggest a looming plateau. Accommodation and food services are expected to rebound, supported by a favourable domestic tourism External link. season. Meanwhile, muted growth in professional services appears consistent with hiring challenges for young people, graduates External link. or not External link., who are bearing the brunt of a stalled labour market.

Implications

A modest rebound was expected for Quebec’s economy after the steep annualized 2.4% contraction in the second quarter (-2.3% GDP by industry). Persistent uncertainty over US trade policy continues to weigh on exports, as reflected in partial data, and is likely to dampen growth for several more quarters. Our latest forecasts reflect this outlook, calling for a gradual recovery through year-end, with real GDP rising 0.7% in 2025. Domestic demand should also lose some steam after a surprisingly strong start to the year given the challenging backdrop.

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.