Quebec economy shrank from January 2025 to 2026, statistics show

Quebec’s economy was slightly smaller in January 2026 than it was the year before amid a decline in the province’s sector, Quebec’s statistics agency said Tuesday.

The Institut de la statistique du Québec said Quebec’s real gross domestic product was down 0.7 per cent in January 2026 when compared to January 2025 as the manufacturing sector’s contribution to GDP shrank by 5.5 per cent.

January 2025 was a particularly busy month for economic activity, Desjardins economist Sonny Scarfone said in a research note.

“January 2025 remains, to date, the month with the highest level of economic activity, as several exporters advanced shipments ahead of the anticipated introduction of tariffs,” he wrote. “This pattern is reflected in subsequent sectoral trends: goods-producing industries are down 3.7 per cent year-over-year, while services have posted modest growth of 0.3 per cent.”

The ISQ says month-over-month economic growth was flat in Quebec in January as the province’s goods-producing sector grew by 0.1 per cent from December 2025, but service industries shrank by 0.1 per cent.

The province’s economy grew by 0.3 per cent in December — the first increase in three months.

Scarfone said the data “suggest that Quebec’s economy showed resilience early in the year” but that the increase in the oil price is reducing the purchasing power of Quebecers and that with the province’s aging population, real GDP growth in the province is likely to remain limited without productivity gains.

Across Canada, GDP grew by 0.1 per cent from December to January and was up 0.6 per cent from the year before.

“It is worth noting that after underperforming the Canadian economy as a whole from January to July 2025, the Quebec economy has grown at a pace similar to the rest of the country in recent months. However, the uptick in economic activity since the second half of 2025 has not been sufficient to close the gap with the rest of the country,” Daren King, an economist with National Bank of Canada Capital Markets said in a research note.

Editor’s Picks