Statistics Canada says GDP edged up 0.1 per cent in November
February 3, 2020 by Craig Wong, The Canadian Press
The Canadian economy edged higher in November, reversing most the decline seen in October, as cold weather helped boost the utilities sector and the construction and retail sectors also gained ground.
Canada’s real gross domestic product grew 0.1 per cent in November, Statistics Canada said Friday.
Economists, on average, had expected no growth for November, according to financial markets data firm Refinitiv.
CIBC senior economist Royce Mendes said the result for November came despite temporary factors that had been expected to restrain growth, including a pipeline outage, a strike at Canadian National Railway Co. and the weather.
But Mendes said: “investors shouldn’t miss the forest for the trees here.”
“While this report provided a slight upside surprise, it doesn’t change the overall narrative that the economy likely materially underperformed in the fourth quarter,” Mendes said.
“And, while some of that weakness will prove transitory, underlying trends in the labour market remain soft enough that household spending could continue its recent lacklustre trend.”
Statistics Canada said goods-producing industries edged up 0.1 per cent after falling in September and October, while services-producing industries also edged up 0.1 per cent.
Increases in 15 of 20 industrial sectors tracked by the agency more than offset declines in the mining, quarrying and oil and gas extraction and transportation and warehousing sectors.
Cold weather in central Canada helped the utilities sector climb 2.1 per cent in November, while the construction sector rose 0.5 per cent. Retail trade increased 0.5 per cent for the month.
The mining, quarrying and oil and gas extraction sector fell 1.4 per cent in November, while the transportation and warehousing sector dropped 0.9 per cent.
Rail transportation fell 3.8 per cent as it was hit by an eight-day strike at CN Rail and pipeline transportation dropped 2.2 per cent due to a pipeline closure.
TD Bank senior economist Brian DePratto said the tests of Canada’s economic resilience will continue.
“The list of temporary factors weighing on the Canadian economy seems to grow longer every day, with the novel coronavirus the latest addition,” he said.
The Bank of Canada kept its key interest on hold at 1.75 per cent earlier this year. However governor Stephen Poloz left the door open for future rate cuts if the weakness in the economy is more persistent than expected.
The central bank has estimated the economy slowed to an annual growth rate of 0.3 per cent in the fourth quarter of last year, but predicted a rebound to about 1.3 per cent annual rate in the first quarter of 2020.
Poloz has said the Bank of Canada will be paying particular attention to developments in consumer spending, the housing market and business investment.