Statistics Canada, the country’s central statistical office, announced on January 31 that Real GDP increased 0.4% between October and November, to C$1.69 trillion (about $1.29 trillion U.S.), as a result of strengthening manufacturing and construction levels, as well as natural resource development. Economists at the Royal Bank of Canada had initially expected an increase of 0.3%.
GDP increased 1.6% in November 2016, compared to the same month in 2015. Statistics Canada also revised October’s GDP decline to 0.2%, from an earlier estimate of 0.3%.
GDP growth in November was due in large part to higher manufacturing output. After a 1.7% fall in October, production rose 1.4% in November, the largest increase in the previous five months. Output increased 0.6% on a year-over-year comparison.
Jamie McCabe, president of McCabe Promotional Advertising (asi/264901), says his company’s clients have been eager to buy the Canadian-made goods they’re offering this year for Canada 150. His company has already increased year-over-year sales by 30%. “One of our strategies leading up to the sesquicentennial was to research and develop a robust offering of made-in-Canada goods,” he says. “The reaction from our client base has been phenomenal. The timing was serendipitous with Trump's potential changes within NAFTA, and we’ll continue to research and grow our collections.”
Canadian construction activity grew 1.1%, after falling 0.6% in October. Mining and energy extraction, particularly oil and gas, grew 1.4% in November thanks to increased activity in the Alberta oil sands, as well as in iron ore and potash. This follows a 0.5% decrease the previous month.
Goods-producing industries grew 0.9% between October and November, while the services sector grew 0.2%, and the finance and insurance industry rose 1.5% – its best month-over-month growth in almost two years. Retail trade also grew 0.7% in November.
However, the country saw contraction in the wholesale and real estate markets, which fell 0.2% from October, its first month-to-month decline since 2014. Statistics Canada ascribed the decrease to new mortgage-lending policies put into effect in mid-October in order to rein in the housing market. It reports that activity among real estate agencies and brokerages fell 6.2% between October and November.
The utilities market also declined by 3% month-over-month, due to unseasonably warm weather in the western part of the country.
While the numbers look promising, some economists are preaching caution. “Overall, the drag on the economy from the oil price slump has finally faded, but the decline in real estate is a sign that the nascent housing downturn represents a new drag on economic growth,” Paul Ashworth, chief North American economist at Capital Economics, wrote in a research note. “It also remains to be seen whether the Trump administration’s policies will be a positive (via fiscal stimulus) or negative (border adjustment, protectionism) for Canada.”
Promotional products professionals are also cautiously optimistic about Canada’s economy. Stan Gallen, senior vice president of sales & marketing at Debco (asi/48885), says that the positive numbers are heartening, but that Canada’s economy is far from flourishing. “Uncertainty has become the new norm and we’ve had to adapt quickly to an ever-changing landscape that’s more tied to the global economy than ever before,” he says. “In years past, forecasting was a bit more predictable than it is these days. The butterfly effect is now more pronounced, with even the most seemingly insignificant policy changes making a difference in our own country.”
Meanwhile, McCabe is certain about his company’s – and the industry’s – ability to adapt to policy changes. “With change comes opportunity, and we’re interested to see if there will be a shift in the global trade agreements,” he says. “It may mean opportunities to improve trade agreements between Canada and other countries. Trump is changing the landscape quickly with no plans to slow down. We will do our best to adapt and react to the best of our abilities.”