Statistics Canada Reports Economy Grows 0.3% in October

OTTAWA — Statistics Canada has announced that the economy experienced a growth of 0.3 per cent in October. This increase was primarily supported by strong performances in the mining, quarrying, and oil and gas extraction sectors, following a growth of 0.2 per cent in September.

The agency noted that service-producing industries saw a rise of 0.1 per cent this month, marking the fifth consecutive month of growth. In contrast, goods-producing industries rebounded with a notable increase of 0.9 per cent after four months of declines.

Specifically, mining, quarrying, and oil and gas extraction rose by 2.4 per cent in October, with all three subsectors contributing to this growth. Oil and gas extraction was particularly influential, increasing by 3.1 per cent.

Manufacturing also showed signs of recovery, rising by 0.3 per cent after trending downwards for four months. This growth was chiefly driven by non-durable goods manufacturing.

CIBC senior economist Andrew Grantham described the October gains as "a larger-than-expected stride forward," indicating that these results surpassed consensus forecasts. However, he cautioned that early indicators for November suggest a potential setback in the economy for that month.

According to preliminary estimates from Statistics Canada, the real GDP for November may have declined by 0.1 per cent. This decrease is attributed to declines in mining, quarrying, and oil and gas extraction, transportation and warehousing, and finance and insurance. These drops were somewhat offset by gains in accommodation, food services, and real estate and rental services.

Grantham indicated that amidst this monthly volatility, the GDP growth for the fourth quarter appears to be slightly below the Bank of Canada's projections and the economy's long-term potential. As a result, it is expected that the central bank could lower its key policy interest rate by a quarter percentage point in January, rather than implementing larger cuts as seen in previous meetings.

Despite some areas of the economy already showing improvement due to earlier interest rate cuts, Grantham noted that additional relief may be necessary in the New Year to address the output gap.

The real estate and rental sectors saw a rise of 0.5 per cent, marking the largest monthly increase since January, and the sixth straight month of growth. This increase correlated with a surge in national home sales, particularly in major markets like Greater Toronto and Greater Vancouver.

The construction industry also expanded by 0.4 per cent in October, mainly driven by progress in non-residential building construction.

Wholesale trade recorded a second consecutive month of growth, increasing by 0.5 per cent. The sale of building materials and supplies significantly contributed to this growth, as demand rose for lumber, plywood, and millwork.

Canadian Chamber of Commerce senior economist Andrew DiCapua predicts that GDP growth for the fourth quarter could approach two per cent. He mentioned that if this positive momentum continues, it might influence the Bank of Canada's decisions regarding rate cuts in January. However, he remains cautious about potential challenges ahead due to tariffs, reduced immigration targets, and increased business uncertainties.

Ultimately, it is promising to see the economy end the year on a positive note with solid GDP figures.

economy, GDP, growth