MNI: Canada's Economy Ekes Out November Growth After Stalling

Canada's gross domestic product showed a glimmer of growth in November after stalling out the previous three months with gains at industrial companies countering weakness in retail sales, perhaps enough momentum for the economy to advance through the fourth quarter.

Output by industry climbed 0.1% in November according to Statistics Canada's flash estimate Friday from Ottawa. Gains included manufacturing, transportation and warehousing, and agriculture and forestry.

GDP was little changed in October, lagging the economist consensus for a 0.1% increase, and StatsCan revised September to show no change from the prior estimate of a 0.1% increase. 

Retail sales climbed the most since January with a 1.2% increase and the public sector also helped boost growth in October. Manufacturing fell 0.6%, the fourth decline in five months and wholesaling declined 0.7%. Real estate broker and agent activity fell 6.8%, the fourth straight decline. The numbers came with several one-off influences such as a strike along the St. Lawrence Seaway and retooling shutdowns in autos, mining and energy facilities.

Canada's economy has on average stalled out over the last few quarters amid a sluggish global economy and the central bank's 10 rate increases, though Governor Tiff Macklem says inflation remaining above his 2% target for almost three years requires more patience before looking at loosening monetary policy. The Bank has forecast growth at a 0.8% annualized pace in the fourth quarter and says a period of below-potential growth is needed to balance the economy after a period of overheated demand.

Other evidence of fading output has emerged in recent months with inflation slowing to 3.1% and unemployment rising to the highest in almost two years. There are still pockets of robust price gains including wages running around 4% and food prices still more than double the Bank’s overall inflation target. The growth outlook still has a few quirks. Wildfires and floods disrupted some industries over the summer and labor strikes continue with a major one ongoing among public sector workers in Quebec. Record immigration is also boosting the economy’s potential output while putting some pressure on housing costs.