TORONTO – Canadian economy grew slightly more than expected in November, bolstered by major industrial sectors, but the report from Statistics Canada left economists cautious about the strength of the recovery from a weak summer.
November’s gross domestic product grew 0.3 per cent from October, above the consensus forecast of 0.2 per cent. That followed October’s month-over-month increase of just 0.1 per cent.
Statistics Canada said Thursday that sectors with big improvments in November included mining, quarrying and oil and gas extraction, up 0.8 per cent.
Meanwhile, the important manufacturing sector was up 0.7 per cent following a 0.9 per cent decrease in October.
Wholesale and retail trade, utilities and transportation and warehousing services also rose, while construction and the public sector were largely unchanged.
Accommodation and food services and the finance and insurance sectors shrank.
“A key question is whether we are seeing a turnaround in manufacturing that could sustain stronger growth or just a monthly blip that will leave our economy treading water,” said economist Erin Weir, president of the Progressive Economics Forum.
Weir said in a note that annual economic growth remains at only 1.3 per cent, barely ahead of the one per cent growth in population.
Robert Kavcic, senior economist at BMO Capital Markets, said that despite the November numbers, growth in the fourth quarter will likely remain stuck at about one per cent.
Kavcic said that was consistent with an economy that is still growing “at a sluggish pace.”
Emanuella Enenajor, an economist at CIBC World Markets, said the November GDP — although a “touch stronger” than the consensus estimate — was in line with CIBC’s predictions.
“Overall, an upbeat report suggesting that economic activity picked up from its fall doldrums, although still lagging potential output growth,” Enenajor said.
She said the November data suggest fourth-quarter growth could track around 1.4 per cent, which would be “supportive for the Canadian dollar (but) a negative for fixed income.”