Canada’s gross domestic product edged up 0.1 per cent in the month of June, with 0.8 per cent real GDP growth in the second quarter of this year, Statistics Canada said Wednesday.
The Canadian economy grew at an annual rate of 3.3 per cent during the second quarter, its fourth consecutive expansion.
After flat growth in May, 14 of 20 industrial sectors had a slight expansion in June, with client-facing industries — like travel and restaurants — driving much of the growth after the easing of public health and border restrictions.
But the data agency said there are early indications that the real GDP came down by 0.1 per cent in July, particularly in manufacturing, retail trade, wholesale and utilities sectors.
Andrew Grantham, senior economist at CIBC, said in a note Wednesday morning that GDP growth, while solid overall in the second quarter, was still “weaker than anticipated.”
A soft start to the third quarter, he said, suggests that “the economy is reacting quicker to rising interest rates than the Bank of Canada may have been anticipating.”
The Bank of Canada has called the Canadian economy “overheated” and has been combatting high inflation with a series of interest rate hikes.
In its ongoing campaign to cool the annual inflation rate, which reached 7.6 per cent in July, the central bank increased borrowing rates to 2.5 per cent in July. Another jumbo rate hike is expected on Sept. 7.
The report says businesses ramped up their investments in inventories, engineering structures and machinery and equipment.
Meanwhile, household spending on semi-durable goods rose, with the jump driven by an increase in spending on clothing and footwear as more people headed back to the office.
At the same time, housing investment declined in the second quarter along with household spending on durable goods.
WATCH | BMO economist Doug Porter says Canadians still eager to spend:
Canadians still eager to spend, says BMO economist
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Doug Porter, chief economist for Bank of Montreal, says there is ‘still a bit of firepower’ in Canadians’ spending right now, despite the hit that higher interest rates have inflicted on the housing sector.
“We’re seeing that those interest rate hikes are starting to take a pretty big bite out of the housing market,” said Randall Bartlett, senior director of Canadian economics with Desjardins, in an interview with CBC News.
“We’re anticipating that consumption is going to start to slow somewhat as well, just given the fact that interest rates are higher and we’re seeing that consumer credit is starting to increase somewhat,” he said.
“[As] the savings rate is coming down, it’s going to be more challenging environment for Canadians who are used to being able to borrow relatively inexpensively for consumption, too.”
Disposable income rose — as did household incomes, with higher compensation of employees — but savings rates declined from 9.5 per cent to 6.2 per cent in the second quarter.
By comparison, that rate was 2.7 per cent at the end of 2019, the agency said.
While the report provides the aggregate savings rate, Statistics Canada noted that savings rates tend to be higher among those in higher income brackets.
“Although these estimates suggest ongoing resiliency in household net savings, inflationary pressures on consumption and trends in employee compensation will likely be key determinants of future outcomes,” the agency said in its report.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
