The DLI Fell Sharply in July, Signalling a Recession Ahead for Quebec

The DLI plunged 2.5% in July, its fifth straight monthly decline. It’s now in pre−recession territory and sending a clear message. In the past, whenever the DLI has fallen more than 2% after trending lower for several months, the economy has begun to contract in short order. In 2007, the drop in the DLI started slowly in September before picking up speed in the spring of 2008. A recession then began that fall, six months after the first steep decline in the DLI. If history repeats itself, we could see a recession by early 2023.