OTTAWA — Better-than-expected growth in November pushed the Canadian economy above pre-pandemic levels for the first time in nearly two years, but the Omicron surge in COVID-19 cases is expected to deal it yet another setback to start 2022.
Statistics Canada said Tuesday that real gross domestic product grew for a sixth straight month in November, as it posted a monthly gain of 0.6 per cent to bring it 0.2 per cent above pre-pandemic levels recorded in February 2020.
The growth fizzled though to end the year as the agency said its initial estimate suggests real GDP in December was essentially unchanged.
However, BMO chief economist Douglas Porter said the weakness could be short-lived.
He pointed to growth in November despite devastating flooding in British Columbia, and that the economy looks to have held its ground in December despite Omicron.
“We know that the economy can come back pretty quickly when things reopen,” Porter said.
“So, provided this latest, slight reopening that we’re seeing here at the start of February lasts, I would anticipate a pretty nice rebound in the economy through the rest of the quarter.”
The statistics agency also said its initial estimate is that the economy grew by 4.9 per cent for the full year. The result, which won’t be finalized until next month, is a turnaround from 2020 when the Canadian economy suffered its worst year on record as output shrank by 5.4 per cent.
Driving to the finish line of 2021, Statistics Canada estimated the economy grew at an annualized rate of 6.3 per cent in the fourth quarter, which, if it holds up, would mark the fastest quarterly growth last year.
Gains in November were seen in wholesale trade, which saw its largest monthly growth since July 2020, and manufacturing.
There was also growth in the finance and insurance sector that Statistics Canada attributed to atypically high trading activity in November as investors moved funds to safer assets because of the uncertainty linked to Omicron when it first emerged.
Accommodation and food services also saw increases in November with more travellers and looser restrictions on capacity limits in bars and restaurants in Ontario and Quebec.
Canada’s men’s soccer team also helped strike an economic gain: Statistics Canada said the two World Cup qualifying matches in Edmonton in November, one of which Canada won 1-0, helped grow the arts and entertainment sector by 5.4 per cent.
Tu Nguyen, an economist with consulting firm RSM Canada, said the high vaccination rate across Canada has helped the recovery.
“That allowed us to fill up arenas, and theatres, and hotels, and restaurants, and we saw a significant uptick in in-person activity,” Nguyen said.
Despite the growth for restaurants and sporting events, Stephen Brown, senior Canada economist with Capital Economics, noted the arts and entertainment sector was 20 per cent below pre-pandemic levels, and accommodation and food services still far from its February 2020 mark.
The Bank of Canada warned last week that it expects Omicron to dampen spending in the first quarter, and slow growth to an annualized rate of about two per cent.
Whatever economic growth the country loses in the first quarter will be pushed to the second quarter of 2022, Nguyen said.
Despite an expected contraction in January, Royce Mendes, managing director and head of macro strategy at Desjardins, said he expects the central bank to look at the strong end of 2021 and go forward with a first rate hike in March.
This report by The Canadian Press was first published Feb. 1, 2022.
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.
