Canada Economic Forecast
October 27, 2020The economy likely recovered markedly in Q3. Monthly GDP increased solidly in July, while projections pointed to another healthy expansion for August. Moreover, in September, the unemployment rate fell 1.2 percentage points from the month prior, with the labor market recouping roughly 76% of the jobs lost in March and April. Furthermore, retail sales grew modestly in August, while a flash estimate pointed to a flat reading for September, hinting at stronger private consumption in Q3. In addition, residential investment likely rebounded notably in Q3, as suggested by a surge in housing starts during the quarter. That said, daily crude oil production contracted slightly in July from June, pointing to a subdued energy sector. In politics, Prime Minister Trudeau survived a confidence vote on 21 October thus avoiding a snap election, amid a tightening of some Covid-19 restrictions in recent weeks.
Canada Economic GrowthNext year, GDP is set to rebound robustly as strong fiscal and monetary stimulus support domestic demand. Household spending should benefit from a lower unemployment rate and recovering consumer confidence. That said, recently renewed domestic lockdown and travel restrictions, as well as future developments in commodity prices, pose significant risks to the outlook. FocusEconomics analysts project growth of 4.9% in 2021, which is down 0.1 percentage points from last month’s forecast, and growth of 3.1% in 2022.
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Canada Economic News
November 18, 2020
According to the Teranet-National Bank Composite House Price Index, house price growth accelerated to 1.3% on a month-on-month non-seasonally-adjusted basis in October, from September’s 1.1%.
November 18, 2020
Consumer prices rose a seasonally-adjusted 0.29% in October over the previous month, picking up from September's 0.22% rise.
November 9, 2020
Housing starts rose to 214,875 units on a seasonally-adjusted annualized rate (SAAR) basis in October, according to the Canada Mortgage and Housing Corporation (CMHC), up from September’s 208,715-unit reading.
November 2, 2020
In October, the IHS Markit Manufacturing Purchasing Managers’ Index (PMI) fell slightly to 55.5 from 56.0, but remained upbeat nonetheless.
October 30, 2020
The economy grew 1.2% month-on-month in August, easing from July’s 3.1% increase, although marginally beating Statistics Canada’s preliminary estimate of 1.0% made back on 30 September.