The Canadian economy lowered its shoulder through a surge in COVID-19 cases and plunge of 200,000 jobs in January to eke out a 0.2 per cent monthly gain, Statistics Canada said Thursday.
Goods-producing industries drove gains in January, the agency said, noting the construction sector grew for the third time in four months and the largest monthly gain in wholesale trade since July 2020.
Residential construction grew 4.3 per cent in January, which Statistics Canada said more than offset the previous two months of contractions and was the largest monthly gain since March 2021.
The same couldn’t be said for the services sector that as a whole registered zero growth in January.
Accommodation and food services, and the arts, entertainment and recreation sector each saw their largest monthly declines since the first wave of the COVID-19 pandemic in April 2020.
Statistics Canada also reported that mining, quarrying and oil and gas extraction were down for the third month in a row.
The agency said its initial estimate suggests the real gross domestic product grew 0.8 per cent in February, saying that many of the sectors down in January, rebounded a month later.
Royce Mendes, managing director and head of macro strategy at Desjardins, said after plugging away through January, the economy looks to have hit the accelerator in February as services were buoyed by the fading of Omicron and restrictions being relaxed.
Statistics Canada will finalize the February figure at the end of April.
CIBC senior economist Andrew Grantham wrote in an analysis that the surprisingly resilient January figure and early estimate for growth in February puts economic growth for the first quarter ahead of what was anticipated at the start of the year.
He now expects the economy to grow an annualized rate of four per cent in the first quarter, double the two per cent the central bank forecasted in January in its economic outlook.
But Grantham said growth through the remainder of the year is likely to be slower because of the impact of high inflation on household finances, higher interest rates in response that would slow the boom in the housing market, and potential supply chain issues stemming from Russia’s unprovoked invasion of Ukraine.
“Geopolitical conditions are forcing global trade flows to alter and countries are turning to Canada as a reliable, safe supplier of commodities,” said Tu Nguyen, an economist with the firm RSM Canada.
“What that means is that the commodity sectors, such as mining, oil and gas agricultural sectors in Canada are turning around and they are expected to be very strong this year. They have to fill this gap in the global market.”
Nguyen also said businesses like restaurants and bars hard-hit in January should rebound in the coming months as long as the economy stays open and rising costs don’t force price increases that turn away customers.
Higher costs are weighing on small and medium-sized businesses that the Canadian Federation of Independent Business warned Thursday could slow their recovery and return to pre-pandemic sales levels.
The association’s latest survey of its members noted worries about fuel and energy costs, despite results suggesting that their short-term outlook was the most optimistic since the start of the pandemic.
“It’s good to see small business owners express optimism for the future after the last two years of the pandemic,” Andreea Bourgeois, the association’s director of economics, said in a statement. “However, that does not mean they are in a good position to absorb new costs.”
It’s why the association is looking to next week’s federal budget for some relief.
Thursday’s GDP report landed one week before budget day in Ottawa, and underscores expectations that federal finances my be rosier than expected. An economy growing faster than expected could mean the Liberal government finds itself with extra fiscal room on the back of higher revenues and lower-than-anticipated spending on pandemic aid.
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.
