BRITISH COLUMBIA – Canadian real GDP grew 0.2 per cent in November, following three consecutive months of essentially zero growth.
The growth was driven by the goods-producing sectors, which rose by 0.6 per cent. Manufacturing jumped 0.9 per cent in November, led by growth in chemical manufacturing as a number of plants resumed production following maintenance.
The resilience of the US economy, as well as the end of a strike by Saint Lawrence seaway employees, likely buoyed exports. Construction activity fell by 0.2 per cent overall, while residential construction rose by just 0.3 per cent, slowing from a burst of construction over the summer and fall. Offices of real estate agents and brokers fell for the fifth consecutive month, dropping 1.3 per cent as home resales remained soft amid elevated borrowing costs.
Preliminary estimates suggest that output in the Canadian economy rose 0.3 per cent in December.
Following a period of essentially zero growth in real GDP from the early spring to late fall, November’s GDP read, alongside December’s preliminary estimate, offers hope that the Canadian economy can find its footing and resume growth. If the December preliminary estimate is accurate, real GDP will have expanded by 0.3 per cent in the fourth quarter and by 1.5 per cent in 2023 as a whole.
Although growth remains slow, it is encouraging to note that the economy is still growing in contrast to widely held expectations of a recession. Financial markets continue to expect that rate cuts will begin in the spring and accumulate into the summer. The next rate announcement is on next Wednesday, March 6th.