CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

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CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

Canadian economy continues to grow despite high interest rates

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Manufacturing is cooling off in Canada but still remains ahead of last year's pace, Statistics Canada records indicate. PHOTO courtesy GM

The Canadian economy continues to grow despite the dampening effect of continued interest rate hikes and continued cooling in the manufacturing sector.

Canada’s central bank has raised its benchmark interest rate to 3.75% as part of an ongoing attempt to bring down inflation by slowing down the economy. There are concerns the economy could be slowed to the point that it tips into recession. So far, however, the Canadian economy has continued to show moderate growth.

Real gross domestic product (GDP) edged up 0.1% in August, following a similar increase in July, according to the latest report from Statistics Canada. Advance information from the government agency shows that real GDP also increased 0.1% in September. Advance information for the entire third quarter indicates real GDP increased 0.4%.

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The retail and wholesale trade sectors both grew in August. The retail sector grew 1.2%, a notable rebound from July when output fell back to its December 2021 level. Wholesale trade grew 0.9% in August, up for the second time in seen months. Machinery, equipment and supplies wholesaling (+1.9%) contributed the most to the growth in August.

The manufacturing sector contracted 0.8% in August, the fourth decline in five months and the lowest output level since January 2022. Keeping things in perspective, however, it should be noted that despite the monthly dips experienced this year, manufacturing in August was still up 3.3% compared to August of 2021.

Looking specifically at durable goods manufacturing, which is the staple of the metalworking industry, there was 1.4% slump in August. That was the largest decrease since September of 2021. Despite that worrisome trend, however, durable goods manufacturing in August this year was still 6.1% ahead of August 2021.

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