Canada’s economy is still struggling to grow, fresh GDP data shows
Canada’s economy is still struggling to grow heading into the end of the year after contracting in the third quarter of 2023, according to Statistics Canada.
Real gross domestic product (GDP) for October was “essentially unchanged” for a third consecutive month, the agency said Friday.
Canada’s manufacturing sector saw its fourth decline over five months in October, with contractions in wholesale trade as well. Increased mining activity and retail trade figures helped to offset GDP declines elsewhere, StatCan said.
Strike activity on the St. Lawrence Seaway drove a 0.2 per cent decline in the transportation and warehousing sector in October, according to the agency. Water transportation saw its first drop since the port strikes in British Columbia in July.
StatCan had originally expected slight GDP growth of 0.2 per cent for October in its early estimates. September’s GDP results were also revised down to flat from 0.1 per cent growth.
The initial forecast for November GDP shows the economy might have rebounded somewhat with 0.1 per cent growth, though those figures will be updated in January.
Royce Mendes, managing director and head of macro strategy at Desjardins, in a note said that the uptick in November wasn’t enough to suggest that the economy was turning a corner.
“As more households and businesses feel the impacts of higher interest rates in 2024, we expect Canada to fall into at least a mild recession. So while the economy is sputtering now, it might begin rolling backwards early in the new year,” Mendes added.
Canada’s economic output declined 1.1 per cent on an annualized basis in the third quarter of the year, a sharper drop than most economists had expected.
TD Bank economist Marc Ercolao wrote in a note
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