With the latest Statistics Canada data released on Friday, it appears that Canada’s economy has reached its final growth spurt in September, and now will be bracing for a slowdown come the end of the year.
Canada’s GDP level increased by 1.2% in August, following growth of 3.1% in July. Statistics Canada also released its preliminary estimate for September, calling for the fifth consecutive month of growth at 0.7%. The latest data shows that the economy expanded by 10% in the third quarter, which amounts to growth of 46% on an annualized basis. However according to a previous projection by the Bank of Canada, the economy will likely only see an increase of 1% in the final quarter of 2020, which further attests to the extended recovery period that will commence over the coming quarters.
The latest GDP data also shows substantial improvements across several key sectors. In August, the public sector, which includes services such as health care, education, and social assistance, increased by 1.9%. With record high levels of growth, the public sector has nearly recouped all pandemic-related losses of March and April, remaining only 4% below February levels. The manufacturing sector also recorded increases for the fourth consecutive month, rising by 1.2% in August. Likewise, the construction industry experienced growth of 1.5%, putting activity only 2% shy of pre-pandemic levels.
In the meantime, the real estate and rental and leasing sector expanded by 0.8% in August, with activity at real estate offices soaring by 8.6% amid record high resale activity in the housing market across the country. The accommodation and food services sector rose by 7.3%, as much of the country lifted pandemic-related restrictions on high-infection risk activities. Separately, accommodation services grew by 12.3% in August, but still remain a staggering 38% below February levels as international travel restrictions remain in place.
Additionally, the arts, entertainment and recreation sector grew by 13.7% as many events were able to reconvene during the summer, including spectator sports, performing arts, and heritage institutions. Conversely however, the mining, quarrying, and oil and gas extraction sector experienced yet another contraction of 1.7% in August, as global oil prices have remained subdued since the onset of the pandemic crisis. Utilities also dropped by 2.1% after a 3.4% growth spurt in July stemming from record-breaking heat waves across the country.
Information for this briefing was found via Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.