Canada: Economic activity bounces back in November but still signals a weak Q4
The economy expanded 0.1% month-on-month in November, contrasting October’s 0.1% decline and beating market expectations of a flat reading. Despite the better-than-expected November print, the fourth quarter was plagued with temporary setbacks from labor strikes to pipeline disruptions and the economy is expected to have closed out 2019 on a weak note.
November’s result was driven by stronger growth in the utilities sector as colder weather in November raised heating demand. Moreover, the construction sector robustly expanded from the previous month; growth in the manufacturing sector was flat in November but improved from October’s decline; and the retail trade sector registered a healthy expansion in Q4, contrasting the sharp fall in the month prior.
Commenting on November’s GDP reading, Brian DePratto, director at TD Economics, noted:
“Before we get carried away, a bit of perspective is needed – the risk going into this morning was that we’d be looking at a fourth quarter contraction in output. That thankfully seems off the table, but our revised growth tracking of 0.3% annualized, in line with the Bank of Canada’s estimate, is still pretty much a standstill.”