Canada: Economy contracts at sharpest pace since December 2022 in November
GDP reading: GDP fell 0.2% month-on-month in seasonally adjusted terms in November (October: +0.3% mom). November’s outturn marked the worst reading since December 2022, and was partly caused by work stoppages hitting transport activity and mild weather plus drought dampening utilities output. an annual basis, monthly GDP grew 1.5% in November, which was below October’s 1.9% expansion.
Drivers: 13 of 20 sectors shrank in November. Goods-producing industries fell notably led by declines in mining, oil and gas, and utilities. Moreover, services edged down after five months of growth.
GDP outlook: Preliminary data shows a 0.2% rise in real GDP for December, driven by gains in retail, manufacturing, and construction, partially offset by declines in transportation, real estate, and wholesale trade. This would put the Q4 expansion at 1.8% in quarter-on-quarter annualized terms. That said, economic activity from Q1 2025 onwards will be dented by U.S. trade restrictions.