2018 economic prospects
The survey revealed that 90% of business leaders are optimistic about what 2018 has to bring for their sector, compared to only 74% of respondents last year. The confidence index for the sector is up significantly compared to predictions from last year: 77.4% for 2018, compared to 67.8% for 2017. This is the highest threshold observed since 2011. Since 2016, CEOs’ optimism about economic perspectives in the greater Québec City area has been on the rise. Regarding the Canadian economy, the economic vitality index is excellent for the second year in a row. Furthermore, global economic prospects, which have been stagnant for the past four years, have clearly improved over previous years. The same is true of prospects for the American economy, which had decreased last year.
Businesses are continuing to expand
In 2018, CEOs in the greater Québec City area indicated that they are still expanding, and will continue to invest, hire and diversify their markets outside of Quebec.
- Investment intentions: 79% of respondents are planning to invest in their companies in 2018. This is the highest level observed since 2012. In 2018, most leaders are planning to invest in R&D (57%) and IT (54%). Investments in acquisitions and expansion are up 10 points over last year.
- Exports and market diversification: 66% of CEOs confirmed that they made sales outside of Quebec in 2017. Again, this is the highest level observed since 2012. In terms of diversification, 66% also said that they intend to develop new markets in 2018. This figure is growing steadily and has doubled since 2012 (33%).
- Hiring intentions: 77% plan to hire and increase the number of employees in their business this year, compared to 66% in 2017. Hiring will be primarily aimed at supporting business growth (69%).
The optimism and confidence of the area’s CEOs are consistent with the favourable economic climate. The Québec City CMA showed remarkable economic strength in 2017, with the creation of 4,300 new jobs and an anticipated GDP increase of 2.6%. The area has entered into a period of growth that is set to continue in 2018, which should show a hiring increase of 1% (+4,000 jobs) and a GDP increase of 2.5%. Non-residential investment should surpass the $1 billion mark.
Sources of concern: recruitment and retention
While business leaders are confident and optimistic overall, recruitment and retention will be a key issue this year. Of the leaders surveyed, 92% noted difficulties in finding labour; of those, 57% said that this was a consistent issue. This situation has been intensifying every year since 2013—the number of CEOs who have indicated difficulties with recruitment is up 13 percentage points.
- Furthermore, 63% of respondents stated that their recruitment issues could slow the growth of their business (compared to 55% last year).
- None of the proposed measures for facing labour shortages drew a majority vote, indicating the importance of diversifying approaches. That said, the most popular measure was the relaxation of criteria involving foreign workers.
“The Québec City area’s economy has been growing steadily for more than 26 years. According to our predictions, businesses should continue expanding in 2018. However, we are aware that labour shortages are the primary concern for the coming year. Our commitment to economic development means that we will use all of the means at our disposal to face this challenge. With that in mind, Québec International will redouble its efforts this year and increase the number of initiatives to attract the workers we need to the area,” stated Carl Viel, President and CEO of Québec International.
About Québec International
Québec International’s mission is to contribute to the economic development of the Québec metropolitan region and enhance its international status. As a regional economic development agency, Québec International fosters business growth and development, supports key clusters and attracts talent and investments to the area. To learn more, visit www.quebecinternational.ca.