The data published in the end of January showed that the Canadian economy rebounds, whereas the manufacturing sector becomes a driving force of the country’s economy. In particular, the report indicated the GDP growth of 0.4 percent in November, compared to the contraction of the Canadian economy by 0.3 percent in October.
StatsCan, the national statistical agency of Canada, pointed out that the return of the Canadian economy to the zone of growth occurred primarily thanks to a higher output in such industries like construction, finance and insurance, oil and gas extraction, quarrying, mining, and manufacturing.
The country’s economy rebounded in view of the growing production of goods in Canada. The good-producing industries increased their output by 0.9 percent of GDP in November, whereas this indicator declined by 0.1 percent In October. At the same time, the sector of services, including such industries like warehousing and transportation, retail trade, finance and insurance, rose by 0.2 percent of GDP.
The senior economist at the DT Economics Brian DePratto pointed out that “the Canadians have experienced one of the busiest months of 2016, and this caused November to be one of the economically healthiest month in recent years.”
Yet, the Canadian national statistical agency said that the country’s economy has risen in the last 5 out of 6 months, presented in the GDP reports. The manufacturing industry has particularly contributed to the overall GDP growth, whereas StatsScan reported that this industry has constantly grown since June, with the only exception in October. However, there are some weakspots in the country’s economy, as well. In particular, it is going about wholesale trade as well as real estate, rental and leasing industries, which suffered a decline of output even in November.
Despite the long-term downward term, the manufacturing industry has been a driving force of the Canadian economy during the recent months
Robert Kavcic, a chief economist at the BMO Capital Markets, an investment bank, said about the economy’s growth the following: “GDP of the country’s economy grew at a decent rate of 0.4 percent in November, which is definitely stronger than predicted and sets the country back in the direction of growth”. Kavcic said that their investment bank is eagerly expecting the time when the national statistical agency will publish a quarterly data. He predicts that the economy of Canada will grow by 2.0% on the annual basis, stating that the latest data proves that the national economy sticks to the pace, needed to reach such an economic growth.
There have been some concerns over a possible cut of interest rates by the Bank of Canada, in case if the economy growth was too sluggish. However, the recent reports show that the national bank might consider even raising interest rates in order to hold back inflation. Yet, Robert Kavcic confirms that now “the country is back on the track of recovery and the latter report just strengthens this view.” On the other hand, DePratto said that there is “no much incentive for the Bank of Canada to make any significant steps. Instead, the bank would be happy to keep adhering to the present monetary policy, without making any additional changes.”