Consumption in Canada
Canada - Consumption
GDP contracts in the second quarter
GDP decreased 1.1% in seasonally-adjusted annualized terms (SAAR) in the second quarter of 2021, contrasting the 5.5% expansion logged in the first quarter. On an annual basis, GDP rose 12.7% in Q2, accelerating from the previous quarter's 0.3% increase.
The contraction in SAAR terms was predominately driven by a 3.2% decline in fixed investment, after rising 16.6% in the first quarter. Moreover, private consumption growth eased to 0.2% in Q2, slowing from Q1’s 2.6% expansion. Meanwhile, government consumption growth dipped slightly to 6.1% from 6.9% in Q1.
On the external front, exports of goods and services declined 15.0% on a SAAR basis in the second quarter, which contrasted the first quarter’s 3.3% increase, while imports of goods and services fell 0.2% in Q2 (Q1 2021: +4.3% SAAR). Consequently, the external sector contributed negatively to overall GDP in Q2, subtracting 1.2 percentage points, which was more than the 0.1 percentage-point subtraction in the first quarter.
Meanwhile, a flash estimate released by Statistics Canada showed the economy shrank 0.4% on a seasonally-adjusted month-on-month basis in July, which contrasted June’s 0.7% expansion.
Commenting on the outlook, Sri Thanabalasingam, senior economist at TD Economics, noted:
“Looking further ahead, clouds are forming for the Canadian economy. Primarily, the Delta variant is spreading quickly in Canada, resulting in an uptick in cases and hospitalizations. International experience suggests this could be the beginning of a prolonged battle with this strain of the virus. Provinces and businesses are already responding to the threat with a number of policies such as vaccine passports, mandatory vaccinations and regular testing. While this will likely help mitigate the impact of the fourth wave, business and consumer confidence could be negatively affected. The pandemic is not yet over, and as long as its here, the road to recovery will be a bumpy one.”
FocusEconomics Consensus Forecast panelists see the economy growing 4.7% in 2021, which is up 0.2 percentage points from the previous month’s forecast. In 2022, our panel sees the economy growing 3.9%.
Canada - Consumption Data
|Consumption (annual variation in %)||2.3||1.9||3.7||2.2||1.6|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||1.70||1.00 %||Dec 31|
|Exchange Rate||1.30||0.15 %||Jan 01|
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September 20, 2021
According to the Teranet-National Bank Composite House Price Index, house price growth fell to 1.0% on a month-on-month non-seasonally-adjusted basis in August, from July’s 2.0%.
September 16, 2021
Housing starts ticked down to 260,239 units on a seasonally-adjusted annualized rate (SAAR) basis in August according to the Canada Mortgage and Housing Corporation (CMHC), from July’s 270,744-unit reading.
September 16, 2021
Consumer prices rose a seasonally-adjusted 0.42% over the previous month in August, coming in below July's 0.57% increase.
September 3, 2021
In August, the IHS Markit Manufacturing Purchasing Managers’ Index (PMI) increased to 57.2 from July’s 56.2.
August 31, 2021
GDP decreased 1.1% in seasonally-adjusted annualized terms (SAAR) in the second quarter of 2021, contrasting the 5.5% expansion logged in the first quarter.