Although Canadian GDP was up overall, manufacturing GDP fell off by 0.1% in November. PHOTO courtesy BLM Group.
Canada’s real gross domestic product (GDP) edged up 0.1% in November, following a similar 0.1% uptick in October with 14 of 20 industrial sectors showing gains, according to the latest data from Statistics Canada.
With advance information indicates real GDP was essentially unchanged in December, the fourth quarter of 2022 is expected to show a 0.4% gain in real industry GDP for the fourth quarter and a 3.8% increase for the year.
These estimates will be updated on February 28, 2023, with the release of the official GDP data for December and the fourth quarter of 2022.
In November it was growth on the services side of the economy that boosted GDP (up 0.2%). Transportation and warehousing, for example, rose 1.0% in November, the third consecutive monthly gain, as all subsectors were up. Goods-producing industries suffered a decline of 0.1%. Manufacturing specifically posted a decline in GDP of 0.1%.
“The manufacturing sector has been struggling to gain traction lately, consistent with the slowdown in global manufacturing activity. This development is predominately the result of softer demand for durable goods and cooler construction activity stemming from the rapid increase in interest rates,” commented Alan Arcand, chief economist, Canadian Manufacturers & Exporters.
Arcand noted that the manufacturing sector’s GDP in November fell to its lowest level since January 2022, leaving it 0.5% below its pre-pandemic level.
“Over the past 12 months, manufacturing output has increased by 1.5%, only about half the rate of the overall economy. To make matters worse, an advance estimate indicates that manufacturing sales fell 1.8% in December, suggesting that the sector’s downturn persisted, and possibly steepened, at the end of 2022,” Arcand said.