Canada Economic Forecast

Canada Economic Forecast

November 20, 2018

Although available data suggests growth may have moderated in the third quarter, analysts remain upbeat about economic prospects for the remainder of the year. August’s firm growth reading was driven mainly by the energy and services sectors. Looking ahead to the fourth quarter, unemployment in October ticked down as the number of job seekers declined. A tighter labor market is expected to push up wage growth through year-end, which should keep household-spending growth afloat. Moreover, October’s modest recovery in housing starts confirmed the stabilization of the housing market. Meanwhile, Ivey’s PMI marked an impressive uptick in the same month on the heels of the newly-agreed United States-Mexico-Canada Agreement (USMCA). Firms breathed a huge sigh of relief on the trade resolution and non-residential investment is likely to remain buoyant through the end of the year as a consequence.

Canada Economic Growth

Looking ahead, economic growth is expected to continue moderating as the economy nears full capacity. Meanwhile, rising interest rates and slower job growth could dampen household spending and residential investment, thus further weighing on growth. That said, the USMCA will reduce uncertainty surrounding trade with the U.S. and, in turn, support mainstay export industries. FocusEconomics panelists estimate growth of 2.0% in 2019, unchanged from last month’s forecast, and 1.7% in 2020.

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Canada Facts

ValueChangeDate
Bond Yield2.071.00 %Dec 11
Exchange Rate1.340.15 %Dec 12
Stock Market14,7830.23 %Dec 12

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