Canada: GDP gains steam in October; preliminary estimate points to weaker growth in November
December 23, 2021
The economy expanded 0.8% on a month-on-month seasonally-adjusted basis in October, after growing 0.2% in September. Moreover, on an annual basis the economy grew 3.8% in October, which was stronger than September’s 3.6% rise.
In October, the goods-producing industries rebounded robustly due to stronger construction, manufacturing and utilities output. Meanwhile, the services-producing industries expanded at a slightly faster pace in October relative to the previous month, and predominately the result of healthier professional, scientific and technical services, as well as higher retail trade activity.
In addition, Statistics Canada released a flash estimate for November GDP, which suggested the economy expanded 0.3% in November. The slower increase was attributed to weaker momentum in the mining, quarrying, and oil and gas extraction sector, while wholesale trade and construction output improved relative to October.
Commenting on the short-term outlook, Omar Abdelrahman, an economist at TD Economics, noted:
“With new restrictions recently announced across some provinces in response to rising caseloads, Canada's economy will be susceptible to downside risks during the winter months. The hard-hit service-producing industries will, once again, feel the brunt of the impacts. Additionally, a potential switch to goods spending could exacerbate already elevated supply chain pressures.”
Author: Steven Burke, Economist