(Ottawa) The Canadian economy grew slightly in October, with the latest real gross domestic product (GDP) data coming in stronger than expected.
Statistics Canada says real gross domestic product rose 0.1% in October, beating its preliminary estimate that real GDP would remain unchanged for the month.
Overall, production rose in 11 of 20 industrial sectors in October.
Air travel rose 5.5% in October to the highest level of activity since the pre-COVID-19 pandemic level in February 2020.
Yet despite nine months of uninterrupted gains, Statistics Canada said the level of air travel activity in October was about 34% below pre-pandemic levels.
The federal agency says growth in service-producing industries, led by gains in the public sector, wholesale trade and industries dealing directly with the public, was partially offset by a decline in goods-producing industries.
According to Statistics Canada, the performing arts, spectator sports and heritage institutions industries grew 4.7% due to more than usual Toronto Blue Jays games for October, in addition to a late start to the NHL preseason.
Activity in food services and drinking places rose 2.1% in October, offsetting a 1.6% drop in accommodation services that month.
The agency says the slowdown in goods-producing industries in October was led by a decline in mining, quarrying, and oil and gas extraction as well as a weakening in the manufacturing sector.
All metal ore mining industries declined, with the largest decline in copper, nickel, lead and zinc ore mining, down 4.8%, followed by gold and silver ores down 2.1%.
According to Statistics Canada, preliminary information indicates that real GDP also increased by 0.1% in November, but this estimate would be revised at the end of January 2023.
Growth of 0.1% in October followed September’s upwardly revised 0.2% increase in real GDP.
“This slowdown in growth is consistent with our view that the lagged effects of rising interest rates and continued high inflation are causing Canadians to gradually tighten [la ceinture] said James Orlando, director and senior economist at TD Economics, in a commentary.
“While there is a lot of data coming out ahead of the Bank of Canada’s next policy decision at the end of January, we believe the bank has yet another hike in store,” he said. This would bring the key rate down to a very restrictive level of 4.5%. »
Indeed, the consensus among economists seems to be that economic growth in the coming months will largely depend on the continued effect of rate hikes.
“The Canadian economy has held up relatively well overall heading into the end of 2022, largely because the services sector is now bearing the brunt,” said Robert Kavcic, senior economist at BMO Capital Markets. , in a customer note.
“But the real question will be how things play out in the first half of next year, when the Bank of Canada’s aggressive rate hikes start to work their way more fully through the system. »