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Canada GDP November 2023

Canada: Economic activity expands at quickest pace since May in November

GDP grew 0.2% month-on-month in seasonally adjusted terms in November (October: 0.0% mom). November’s figure marked the best reading since May and was above market expectations. On an annual basis, GDP rose at a quicker rate of 1.1% in November (October: +0.9% yoy).

Strong manufacturing growth was the key driver of the month-on-month reading. Services activity saw slower growth, partly due to strikes in the education sector.

A flash estimate put GDP growth at 0.3% in December, thanks to increases in manufacturing, real estate, and mining, quarrying and oil and gas extraction. This would translate into 1.2% quarter-on-quarter annualized growth in Q4 as a whole.

On the Q4 outturn, Desjardins’ Randall Bartlett said:

“We’ve seen massively outsized revisions to monthly real GDP in the past two quarters, so one would be wise not to assume that this data won’t be substantially revised a month from now. Indeed, we think the risks to our current tracking are to the downside.”

On the monetary policy implications if the strong Q4 data is confirmed, TD Economics’ Marc Ercolao said:

“The Canadian economy looks to be finishing the year on a stronger note than most expected. Markets are still focused on the timing of rate cuts, but a heating up of the Canadian economy may push expectations for a first cut further down the line.”

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