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.
Canada Economy Data
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Canada Economic News
July 16, 2021
Housing starts ticked down to 282,010 units on a seasonally-adjusted annualized rate (SAAR) basis in June according to the Canada Mortgage and Housing Corporation (CMHC), from May’s 286,296-unit reading.
July 2, 2021
In June, the IHS Markit Manufacturing Purchasing Managers’ Index (PMI) fell from 57.0 in May to 56.5.
June 30, 2021
The economy fell 0.3% month-on-month in April, contrasting March’s 1.3% increase, but noticeably softer than Statistics Canada’s preliminary estimate of a 0.8% drop made in early June.
June 17, 2021
According to the Teranet-National Bank Composite House Price Index, house price growth eased marginally to 2.7% on a month-on-month non-seasonally-adjusted basis in June, from May’s 2.8%.
June 16, 2021
Consumer prices rose a seasonally-adjusted 0.36% in May over the previous month, moderating from the 0.58% increase logged in April.