The Canadian economy grew 0.3% in November after a flat October and negative growth of 0.5% in September, Statistics Canada announced January 29.
Increases were seen in wholesale and retail trade, up 1.3% and 1.2%, respectively, as well as utilities (up 1.0%), mining, quarrying and oil and gas extraction (up 0.6%) and manufacturing (up 0.4%).
BMO chief economist Douglas Porter said the month’s results were in line with expectations “for a change,” and made November one of the strongest months in the past year, but he cautions against reading too much into this, pointing out that “one month does not make a trend.”
“Note that even with the sturdy monthly gain, real GDP was still up a paltry 0.2% from year-ago levels, although that is an improvement from the 0.2% year-over-year drop recorded in the prior month; that sad fact came out just two days before Christmas and was widely overlooked at the time,” Porter said.
“Even with the respectable showing in November, the weak start to the quarter leaves it challenged to post any growth at all in Q4.”
Porter said the 0.6% increase in mining and oil and gas was related to production at Syncrude, but he points out that the sector is still down 6.4% year-over-year.
CIBC Economics’ Nick Exarhos said the month’s numbers are disappointing.
“Although November’s GDP outcome is a welcome return to growth, given the weakness in the preceding two months, the best we can still hope for is that Q4 growth won’t be negative,” Exarhos said.
Porter said the economy is still “struggling to post sustainable growth—most vividly highlighted by the fact that GDP has risen a microscopic 0.2% in the past 12 months combined.
“In light of that stark reality, we don’t view our 1% call for 2016 as being particularly bearish.”
As of press time, the Canadian dollar was trading at 71.03 cents U.S., down about half a cent.
