Canada: Economic activity posts quickest growth since April in October
GDP reading: GDP expanded 0.3% month-on-month in seasonally adjusted terms in October (September: +0.2% mom). The result marked the best reading since April. On an annual basis, monthly GDP rose 1.9% in October, which was better than September’s 1.7% expansion.
Drivers: Mining and energy extraction contributed the most to October’s growth, partly as several energy facilities resumed production following maintenance in August and September. Manufacturing and services activity also ticked up in October from September.
GDP outlook: Preliminary data shows real GDP fell 0.1% in November, with declines in mining, transportation, and finance partially offset by growth in accommodation, food services, and real estate. That said, for Q4 as a whole, our Consensus is still for the economy to have gained steam from Q3.
Panelist insight: Desjardins’ LJ Valencia said:
“Our latest outlook for real GDP shows growth broadly in line with the Bank of Canada’s (BoC’s) Q4 projection of 2.0% in the October Monetary Policy Report (MPR). Still, our analysis External link.. suggests that as a result of the TMX, crude oil exports and production may increase more noticeably in the final quarter of 2024. When combined with an expected rebound in auto production in Q4 and the new fiscal stimulus measures External link., we believe there may be some upside risk to the BoC’s real GDP growth forecast.”