MNI: Canada Flash Estimates Show GDP Powered Ahead in Q4

Canada's economy powered ahead in the fourth quarter to once again defy some market bets that a recession was emerging, with a flash estimate showing GDP grew at a 1.2% annualized pace, well ahead of the central bank's estimate output stalled at the end of last year.

Statistics Canada also gave a flash estimate showing GDP grew 0.3% in December and the official figure for November of 0.2% growth beat the market consensus for a 0.1% increase.

December increase was driven by manufacturing, real estate, mining, and gas while transport, warehousing, and construction had the largest declines. 

The November figure marked the first increase since May. Goods producing industries climbed the most since January 2023 with a 0.6% increase. Manufacturing rose 0.9%, driven by chemicals as a number of plants restarted production following maintenance-related shutdowns. Wholesale trade grew 0.7%, led personal and household goods while motor vehicle and parts dealers saw record business. Services rose 0.1% despite a public sector strike in Quebec. 

Even with the unexpected strength the economy's prospects have dimmed in the face of the Bank of Canada's 10 interest rate hikes and less fiscal stimulus. Unemployment has risen to the highest in almost two years while elevated food and shelter costs are limiting how much families can spend elsewhere. 

StatsCan says the flash estimates suggest that GDP increased by 1.5% in 2023 as a whole.