Weighing down the economy in August was the country’s agriculture sector, which posted its second straight monthly decline that Statistics Canada notes were the largest back-to-back monthly contractions since it began collecting comparable data in 1997.
The agency is providing a preliminary estimate for September that suggests real gross domestic product was essentially unchanged for the month.
Statistics Canada says gains in several sectors were more than offset by a significant drop in manufacturing and decline in retail trade, hinting at the supply-chain bottlenecks that have weighed on growth.
The estimate for September suggests the economy grew at an annual rate of 1.9% in the third quarter, but that figure could change once the agency finalizes figures next month.
Statistics Canada says total economic activity in August was about 1% below pre-pandemic levels recorded in February 2020, a gap that didn’t change in September.
TD Bank senior economist Sri Thanabalasingam says closing that remaining gap could be challenging because global supply-chain disruptions and labour market imbalances could crimp output across sectors for months to come.
On Wednesday, the Bank of Canada revised down its projection for growth in the third quarter of the year to 5.5% from an annualized rate of 7.3% in its previous forecast.
“With supply constraints expected to continue to weigh on the economy through the fourth quarter, output may fall well short of the Bank of Canada’s projection,” Thanabalasingam writes in a note.
“Indeed, with today’s release, the bank may need to, once again, adjust its narrative on the Canadian economy.’
Governor Tiff Macklem warned high inflation rates are likely to go higher as supply-chain issues worsen in the coming weeks. He added the bottlenecks should eventually work themselves out.
CIBC chief economist Avery Shenfeld said Friday the impact from bottlenecks should lessen over 2022 if the source of problems, often Covid-19 outbreaks abroad, heals.
On Friday, Finance Minister Chrystia Freeland was in Rome to meet with her G20 counterparts where she planned to push countries to better share vaccines, which could reduce global outbreaks weighing on trade.
Freeland has previously said the government is keeping an eye on Canadian ports for signs of strain, but the Opposition Conservatives on Friday called on the government to do more to unclog supply chains and help grow the domestic economy.
“As global economies continue to emerge from the Covid-19 pandemic, it has never been more critical to have a plan to tackle the significant economic challenges on the horizon,” Conservative Leader Erin O’Toole said in a statement.
O’Toole in a letter to Trudeau last week called on the government to work with the private sector and White House to shore up the North American supply chain given global challenges.
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.
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.
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.
