November 2022 GDP by industry: Canadian output is clearly slowing down but it’s too early to see recession

Today’s GDP data show Canada’s economy is clearly slowing down with a modest 0.1% uptick in November driven by services and aided by the easing of international travel restrictions. Statistics Canada’s advanced estimate shows no change in December, putting annualized real GDP growth on pace for 1.6% in Q4. This is roughly half the pace of Q3’s growth (2.9%). But all things considered, Canada’s economy is still holding up. It’s too early to see a recession yet in these numbers.

Mahmoud Khairy, Economist, Business Data Lab, Canadian Chamber of Commerce

KEY TAKEAWAYS

• Canada’s real gross domestic product (GDP) has met initial advanced estimates to grow by 0.1% in November, as output gains in services industries (+0.2%) were dragged down by falling goods production (-0.1%).
• Statistics Canada’s advanced estimate shows no change in December. Taken together, these estimates put real GDP growth on an annualized pace of almost 1.6% for 2022 Q4, which is running a little ahead of the Bank of Canada’s forecast (1.3%).
• In November, output increased in 14 of 20 sectors. Services led the way rising by 0.3%, due to gains in the public sector, utilities, and arts & entertainment. Goods production fell by0.1% due to declines in machinery production, chemicals, and printing & related activities.
• Notable movers of the month:
  • Finance and insurance started to reverse trend by increasing 0.5% after three months of contraction. The main contribution comes from increases in household mortgage and non-mortgage debt.
  • The public sector grew by 0.3%, led by both federal government (0.7%) and provincial and territorial public administration (0.7%), while the health care sector and social assistance increased by 0.2%.
  • Retail activity declined 0.6% in November especially in food and beverages (-1.8%) due to price increases. This decline was partially offset by increased gasoline stations’ activity (+4.2%) due to lower prices in Western Canada caused by reopening refineries.
  • Accommodation and food services activity is fluctuating in the second half of 2022. It contracted by 1.4% in November after rebounding from the effects of the Omicron variant in the first half of 2022.
  • Construction fell by 0.7% mainly due to higher interest rates which affected residential construction (-1.8%).

SUMMARY TABLES

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