Economy

Canada’s economy recovered to pre-pandemic levels in Nov, Dec seen flat

Published

3 years ago

February 1, 2022

Canada’s economy climbed to above pre-pandemic levels for the first time in November, bolstering a strong fourth quarter even as activity stagnated in December with the emergence of the Omicron variant, official data showed on Tuesday.

The economy grew 0.6% in November from the previous month, beating expectations for a gain of 0.3%, but growth in December was likely flat, Statistics Canada said. The agency said annualized gross domestic product in the fourth quarter was likely up 6.3%, beating the Bank of Canada’s forecast of 5.8%.

“While not far from the Bank of Canada’s latest estimate, it is a bit higher yet, and is simply another turn of the screw, all but ensuring a rate hike at their next meeting on March 2,” said Doug Porter, chief economist at BMO Capital Markets, in a note.

The central bank held its key interest rate unchanged last week, but said hikes were coming as Canada’s economy no longer needed extraordinary support to deal with the effects of the COVID-19 pandemic.

Money markets are betting on a first increase in March, with a total of six rate hikes this year. The Canadian dollar was trading 0.1% higher at 1.2689 to the greenback, or 78.81 U.S. cents. [BOCWATCH]

The December and fourth-quarter GDP numbers are preliminary estimates, with official data coming next month. Economic activity is now 0.2% above February 2020 levels, Statscan said.

Canada’s goods-producing sector expanded 0.5% in November, while the service-producing sector grew 0.6%. Services were bolstered by higher attendance at major league sporting events, including World Cup men’s soccer qualifying matches.

Still, the economic momentum of November slowed in December as the Omicron variant took hold and provinces tightened restrictions. While analysts expect a hit in January, they see the economy bouncing back again relatively quickly.

“Economic data is expected to look weaker in January with Omicron spread,” said Nathan Janzen, senior economist at RBC Economics, in a note. “But with restrictions already starting to ease, that softening is expected to be short-lived.”

(Additional reporting by David Ljunggren in Ottawa and Fergal Smith in Toronto; Editing by Paul Simao and Raissa Kasolowsky)

Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

2 days ago

October 17, 2024

Anne Joseph

OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

3 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

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Economy

Statistics Canada says manufacturing sales fell 1.3% to $69.4B in August

Published

3 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.

The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.

The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.

Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.

Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.

Overall manufacturing sales in constant dollars fell 0.8 per cent in August.

This report by The Canadian Press was first published Oct. 16, 2024.

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