Quebec's GDP Rises Again Despite Ongoing Trade Tensions With The U.S., Says National Bank

11:18 AM EST, 11/25/2025 (MT Newswires) -- After a lackluster growth of 0.1% month over month in July, Quebec's provincial economy performed similarly in August, said National Bank of Canada.

This time, however, the increase was entirely attributable to the service sector, which grew by 0.1% month over month after a slight contraction in July (-0.1%), noted the bank.

As such, the gross domestic product of services remains essentially at its January level, before the impact of the trade conflict with the United States began to be felt. This is similar to the national performance, with Canada seeing its service production increase by 0.3% since January, stated National Bank.

The goods sector, meanwhile, returned to contraction in August, declining for the fourth time in five months, with the exception of a 0.7% jump in July. As a result, goods sector GDP is now 3.7% below its January level.

Assuming that Quebec's economy shows no growth in September, its output would essentially be stagnant in Q3 (-0.3% on an annualized basis), a disappointment after a 2.5% contraction in Q2, pointed out the bank. Despite this weakness, National Bank isn't particularly concerned at this time.

It's possible that the Quebec economy will rebound in Q4, as suggested by the labor market, it added. Employment has indeed shown impressive resilience, with the unemployment rate falling to 5.3% in October, the level recorded at the start of the trade war and the lowest in the country.

In short, although the Quebec economy remains vulnerable to the uncertainty surrounding trade negotiations with the U.S., the bank believes that Quebec remains well-positioned to face the current challenges.

Households have been less affected by the fight against inflation since 2022 and the resulting restrictive monetary policy, as they are less indebted than elsewhere due to more affordable housing prices.

In fact, despite the current uncertainty, National Bank is seeing greater resilience in the real estate market in Quebec compared with Ontario and British Columbia, in particular. Quebec households have a higher savings rate than elsewhere in Canada, which could enable them to better withstand headwinds.

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