The Canadian economy grew for the fifth month in a row.
In October, the Canadian economy continued its streak of monthly improvements, and it appears that it did so again in November, bringing total economic activity to within a statistical inch of where it was before COVID-19 struck.
While the labour market has already recovered from the significant declines experienced in March and April of 2020, the same cannot be said for economic output.
According to Statistics Canada, total economic activity in October was 0.4% lower than pre-pandemic levels in February 2020, with 0.8 per cent GDP growth for the month.
According to preliminary figures, another gain in November would close the difference to only 0.1 per cent, according to Statistics Canada.
According to BMO Chief Economist Douglas Porter, getting GDP back to where it was in February 2020 is only one economic indicator, and it doesn’t always imply a full recovery once population growth is factored in.
Due to an expected setback in December and January as a result of additional public health restrictions, he warned that bridging the gap could take a little longer.
“It’s just one sign on the road to recovery,” Porter said, adding that “we’re certainly going to have to repair additional damage in the coming year” as a result of the new limits.
With October’s increase, the Canadian economy earned its fifth consecutive monthly rise heading into the Omicron storm. The 0.8% figure was consistent with a preliminary estimate given last month.
Manufacturing, which rebounded by 1.8 per cent in October to more than offset a September drop, was among the sectors that saw gains for the month.
Despite a continuous shortage of semiconductor chips and other supply-chain concerns limiting steady production, output tied to vehicle manufacture was the sector’s driving force.
“That industry still has a lot of room to rebound,” Porter added. “That’s one area where I’m hoping for much better news in the coming year.”
Gains in retail commerce, construction, and house resale activity also helped in October. In October, the arts and entertainment sector grew as well, owing to increased audience capacity limits.
According to TD analyst Omar Abdelrahman, those very sectors will bear the weight of tightening capacity limits and other repeated restrictions once again.
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