Canada: Economic activity growth remains broadly unchanged in August; flash estimate points to further small expansion in September

GDP expanded 0.1% in month-on-month seasonally-adjusted terms in August, matching July's 0.1% increase and above market expectations. July’s figure had also beaten market expectations. In August, growth in the services sector more than offset contractions in construction, manufacturing and mining.

On an annual basis, monthly GDP rose at a softer pace of 4.0% in August (July: +4.4% yoy).

The economy expanded a preliminary 0.1% in September, which if confirmed would bring annualized quarter-on-quarter Q3 growth to 1.6%.

On the reading and outlook, Desjardins’ Randall Bartlett said:

“While the Canadian economy isn’t hitting it out of the park, upside surprises to Statistics Canada’s flash estimates are a welcome development. […] we expect activity in goods-producing sectors to weigh on output in Q4 as the US and Canadian economies continue to see growth momentum fade.”

FocusEconomics Consensus Forecast panelists see GDP increasing 1.0% in 2023, which is down 0.4 percentage points from the previous month’s forecast, before growth of 1.8% in 2024.