Econ­omy topped ex­pec­ta­tions in Novem­ber

Man­u­fac­tur­ing stages come­back but other sec­tors had strong month as well, sta­tis­tics show

The Hamilton Spectator - - BUSINESS - CRAIG WONG

The Cana­dian econ­omy picked up a bit of steam in Novem­ber, grow­ing slightly more than ex­pected as the man­u­fac­tur­ing sec­tor re­gained much of the ground it lost the pre­vi­ous month.

Sta­tis­tics Canada said Tues­day real do­mes­tic prod­uct grew by 0.4 per cent in Novem­ber com­pared with the 0.3 per cent gain that had been an­tic­i­pated by econ­o­mists, ac­cord­ing to Thom­son Reuters.

The re­sult for Oc­to­ber was also re­vised to show the econ­omy shrank by 0.2 per cent com­pared with an ini­tial read­ing of a 0.3 per cent con­trac­tion.

The re­bound in Novem­ber was broad­based, though an­a­lysts took par­tic­u­lar note of the strength­en­ing man­u­fac­tur­ing sec­tor. It gained 1.4 per cent fol­low­ing an abysmal per­for­mance in Oc­to­ber that saw a 1.7 per cent de­cline.

“Af­ter the surge we saw in ex­port vol­umes in the trade re­port for Novem­ber, a healthy print from the man­u­fac­tur­ing sec­tor was to be ex­pected,” CIBC econ­o­mist Nick Exarhos wrote in a re­port. “Still, there’s a lot of work to be done in the sec­tor, with out­put up only a slim 0.6 per cent from a year ago. In­vest­ment in­ten­tions point to a needed up­turn in ca­pac­ity for the year ahead, but we’ll need to see a bit more vigour in ex­ports to see those plans ma­te­ri­al­ize.”

Other sec­tors that helped boost growth for the month in­cluded the min­ing, quar­ry­ing, and oil and gas ex­trac­tion group, which ex­panded by 1.4 per cent, as well as the fi­nance and in­surance sec­tor, which gained 1.5 per cent. The con­struc­tion group added 1.1 per cent.

For Novem­ber, goods-pro­duc­ing in­dus­tries rose 0.9 per cent, while ser­vice-pro­duc­ing in­dus­tries gained 0.2 per cent, helped by fi­nance and in­surance, re­tail trade and trans­porta­tion and ware­hous­ing.

TD Bank se­nior econ­o­mist Brian DePratto called the Novem­ber re­port “one of the health­i­est monthly GDP re­ports in re­cent mem­ory.”

He said growth in the fourth quar­ter of 2016 is likely to come in ahead of the Bank of Canada’s ex­pec­ta­tions of 1.5 per cent, but a sig­nif­i­cant amount of eco­nomic slack will nev­er­the­less re­main.

“As such, the Bank of Canada will prob­a­bly be happy to leave its pol­icy in­ter­est rate at 0.5 per cent well into the fu­ture, help­ing to sup­port the on­go­ing ab­sorp­tion of the re­main­ing slack,” DePratto wrote.

Novem­ber’s eco­nomic ex­pan­sion is the fifth in­crease in six months, av­er­ag­ing 0.33 per cent over that time. That’s the high­est six-month aver­age since 2014.


Honda em­ploy­ees work on the as­sem­bly line at the au­tomaker’s plant in Al­lis­ton. Pro­duc­tion in the man­u­fac­tur­ing sec­tor gained 1.4 per cent in Novem­ber. Other sec­tors that helped boost growth for the month in­cluded the min­ing, quar­ry­ing, and oil and gas ex­trac­tion group.

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