Economy

Canada's economy seen rebounding on hospitality sector growth – Reuters

Published

3 years ago

October 1, 2021

A truck moves past stacked shipping containers at the Port of Montreal in Montreal, Quebec, Canada, May 17, 2021. REUTERS/Christinne Muschi

OTTAWA, Oct 1 (Reuters) – Canada’s economy likely rebounded in August from a slight contraction in July, buoyed by growth in the hospitality industry, though a withering drought will continue to drag on the important agriculture sector, data showed on Friday.

The Canadian economy contracted 0.1% in July, just beating analyst estimates of a decline of 0.2%, but likely grew by 0.7% in August on jumps in services and manufacturing, Statistics Canada said. The August number is a preliminary estimate.

With the expected rise in August, total economic activity is about 1% below pre-pandemic levels, Statscan said.

“The slightly smaller-than-expected setback in July and nice pop in August suggest that the economy managed to grind out some moderate growth in the summer quarter as a whole,” Doug Porter, chief economist at BMO Capital Markets, said in a note.

The July decline came as a heat wave hit the agriculture sector and manufacturers were dragged down by supply chain woes, while construction declined for the third month in a row.

This was partially offset by strong momentum in services, as the easing of public-health measures continued to drive a rebound in hospitality and tourism, Statscan said.

That strength in services is expected to extend into August and beyond, even as a harsh fourth wave of COVID-19 infections weighs on the prairie provinces of Alberta and Saskatchewan.

Analysts said the Bank of Canada will likely go ahead with another tapering in its Oct. 27 rate decision, though the August gain is likely not enough to move the dial for the central bank on interest rates – especially after a disappointing second-quarter contraction.

“We think the likelihood of (the Bank of Canada) soon following other global central banks in taking a hawkish turn is low,” Stephen Brown, senior Canada economist at Capital Economics, said in a note.

The Canadian dollar was nearly unchanged at 1.2675 per greenback, or 78.90 U.S. cents.

Reporting by Julie Gordon in Ottawa; Editing by Timothy Heritage, Giles Elgood and Mark Porter

Our Standards: The Thomson Reuters Trust Principles.

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Economy

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

Published

6 hours 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

1 day 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

1 day 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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