Canada Economic Forecast
September 1, 2020The economy declined at the sharpest pace on record in the second quarter due to a collapse in private spending and investment activity. Strict lockdown measures dented domestic demand and flagging oil production hindered exports, although a freefall in imports led to the external sector contributing positively to GDP. Turning to Q3, the economy is gradually strengthening. In July, economic activity continued to rebound according to preliminary data, while the unemployment rate fell following a surge in new hires, with more than half of the jobs lost since the onset of the pandemic now regained. Moreover, the labor market should have continued to strengthen noticeably in August following Toronto’s move into “Stage 3” of its reopening in July, boding well for household spending. Meanwhile, the housing market was upbeat in July as housing starts increased strongly, which should support residential investment in Q3.
Canada Economic GrowthThe economy will contract steeply this year, as oil production declines and the elevated unemployment rate weighs on private consumption. That said, robust monetary and fiscal stimulus should limit the downturn. An uncertain outlook for the U.S. economy and future developments in commodity prices pose significant downside risks. FocusEconomics analysts project a contraction of 6.7% in 2020, which is up 0.2 percentage points from last month’s forecast, before growth of 5.0% in 2021.
Canada Economy Data
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Canada Economic News
August 28, 2020
GDP declined at a quicker rate of 38.7% in seasonally-adjusted annualized terms (SAAR) in the second quarter, well below the 8.2% contraction logged in the first quarter and marking the worst reading on record.
August 20, 2020
According to the Teranet-National Bank Composite House Price Index, house price growth decelerated to 0.3% on a month-on-month non-seasonally-adjusted basis in July, from June’s 0.7%.
August 19, 2020
Consumer prices decreased 0.07% from a month earlier on a seasonally-adjusted basis in July, contrasting the 0.96% rise in June.
August 11, 2020
Housing starts increased to 245,604 units on a seasonally-adjusted annualized rate (SAAR) basis in July, according to the Canada Mortgage and Housing Corporation (CMHC), up from June’s 212,095-unit reading.
July 31, 2020
The economy grew 4.5% month-on-month in May, contrasting April’s titanic 11.7% decrease and well above Statistics Canada’s preliminary estimate of a 3.0% increase.