The Montreal economy should fare reasonably well in 2007, with the Conference Board of Canada forecasting real GDP growth of around 1.9% in 2006 and 2.8% in 2007. The main stumbling block to growth this year is still the manufacturing sector, where the after effects of low manufacturing output (down 7.7% in the last five years) have still not dissipated; output and productivity are still paying the price.

Employment, which grew modestly in 2006 (0.9% compared to 1.1% in 2005), will advance 1.5% in 2007. As such, still according to the Conference Board, the aerospace industry will create 200 jobs to fulfill helicopter orders from Bell Helicopter Textron Canada.

The most promising job outlook is in the services sector, expected to grow 2.3% in 2006 and 2.2% in 2007. Such growth would translate into 64,000 additional net jobs, primarily in non-commercial services (+18,300), wholesale and retail sales (+14,000), business services (+11,900) and finance, insurance and real estate (+11,700).

The fly in the ointment will be the sharp drop in residential housing starts, projected at 20% in 2006, and 10% in 2007. This downturn will not affect the entire construction sector given that non-residential projects will go ahead, notably, construction of the new super hospitals.

Lastly, the sectors to watch will be information technology and life sciences, more specifically, the communications, networking and biotechnology segments, which reaped most of the venture capital investments made in Quebec in the first half of 2006.