Real gross domestic product (GDP) edged up 0.1% in November, following a +0.1% uptick in October. Growth in services-producing industries (+0.2%) was partially offset by a decline in goods-producing industries (-0.1%), as 14 of 20 industrial sectors increased in November, reported Statistics Canada on Tuesday.

Statistics Canada

“Advance information indicates that real GDP was essentially unchanged in December. Increases in the retail, utilities, and public sectors were offset by decreases in the wholesale, finance and insurance, and mining, quarrying, and oil and gas extraction sectors. This advance information indicates a 0.4% increase in real industry GDP in the fourth quarter of 2022 and a 3.8% increase for the year. Owing to its preliminary nature, these estimates will be updated on February 28, 2023, with the release of the official GDP data for December and the fourth quarter of 2022,” said the federal agency.

Andrew Grantham, an economist with CIBC Economics, said the Canadian economy continued to grind out growth towards the end of 2022, albeit at a slower pace than earlier in the year.
“The monthly print for November signaled a 0.1% rise in activity, which was in line with the consensus forecast and advance estimate. Services continued to grow, particularly air transport and accommodation & food. However, there was a slight decline on the goods side driven by construction. For Q4 as a whole, GDP was estimated to have increased by 1.6% annualized. While that’s a fairly modest growth rate in comparison to the pace seen earlier in the year, it is still better than most forecasters were expecting before the quarter began due to the rising interest rate environment. It is also very slightly above the Bank of Canada’s MPR forecast. The advance estimate for December indicated a broadly flat reading to finish the quarter, with gains in retail and utilities offset by declines in wholesale and finance. Overall, today’s data show that the Canadian economy continues to cool, but not as yet shift into reverse, in the face of rising interest rates. Little market reaction expected,” he said.
“While not exactly inspiring or surprising, the raft of GDP news for late 2022 suggests that the economy is still gradually churning forward. There are lots of moving parts here, with some sectors retreating and other industries still bouncing back to something like normal. But the overriding message is that the economy is just managing to keep its head above water, which squarely fits with the BoC’s view,” said Doug Porter, Chief Economist, BMO Economics.
James Orlando, Senior Economist, TD Economics, said the Canadian economy continues to show its resilience.
“With today’s print and the flash estimate for December, GDP is likely going to clock in at around 1.6% (quarterly annualized). This is right around Canada’s long-term trend pace, though will mark a step down from the 3% trend of the prior three quarters. This deceleration was always in the cards given the historic Bank of Canada tightening cycle. Looking at the industry sector breakdown, we can see that the interest rate sensitive sectors are feeling the brunt of this, especially in the construction and retail sectors,” he said.”This report isn’t likely to cause the BoC to have any second thoughts regarding its recent pause. The economy hasn’t yet absorbed the impact of past rate hikes. Though we are seeing the beginning of this, there is more to come, with GDP and employment growth set to stall in the coming months. Even though today’s growth numbers are holding up well, the BoC can feel comfortable keeping its policy on cruise control a little while longer.”

Nathan Janzen, Assistant Chief Economist, RBC Economics, said retail trade and accommodation & food service sales both declined in November.

“Consumer spending is still running at a high level, but the Bank of Canada’s Q4 survey of consumer expectations showed that higher inflation and interest rates were cutting into household purchasing plans, particularly for travel and hospitality services. The BoC has announced plans to pause interest rate hikes at current levels, but the 425 basis points of increases to the overnight rate over the last year has yet to fully pass through household purchasing power. We continue to expect household spending to slow going forward as debt servicing costs rise. That means early signs of easing inflation pressures are likely to persist, but also that GDP growth will likely dip into negative territory over the first half of this year.”

(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)

About Us

Canada’s Podcast is the number one podcast in Canada for entrepreneurs and business owners. Established in 2016, the podcast network has interviewed over 600 Canadian entrepreneurs from coast-to-coast.

With hosts in each province, entrepreneurs have a local and national format to tell their stories, talk about their journey and provide inspiration for anyone starting their entrepreneurial journey and well- established founders.

The commitment to a grass roots approach has built a loyal audience with over 120,000 downloads and thousands of subscribers on all our social channels and YouTube. Canada’s Podcast is proud to provide a local, national and international presence for Canadian entrepreneurs to build their brand and tell their story.