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October 2022 GDP: Canadian output exceeding low expectations for the fourth quarter
October 2022 GDP: Canadian output exceeding low expectations for the fourth quarter
Our Chief Economist reviews Canada's GDP data from October 2022.
Stephen Tapp
Today’s GDP data suggest Canada’s economy continues to outperform low expectations. Real GDP growth is on pace for an annualized +1.4% in 2022Q4, which means earlier recession calls may have to wait until the New Year for resolution.
Stephen Tapp, Chief Economist, Canadian Chamber of Commerce
Key Takeaways
- Canada’s real gross domestic product (GDP) grew by 0.1% in October, as output gains in services were dragged down by falling goods production.This outcome is slightly better than the initial advanced estimate of essentially unchanged growth.
- StatCan’s advanced estimate for November is 0.1% growth (which was originally reported as 0%). Taken together, these estimates put real GDP growth on an annualized pace of almost 1.5% for 2022Q4, which is running ahead of the Bank of Canada’s forecast (0.5%).
- In October, output increased in 11 of 20 sectors. Services led the way rising by 0.3%, due to gains in the public sector, wholesale, and customer-facing industries. Goods production fell0.7%, due to declines in mining, oil and gas, and manufacturing.
- Notable movers on the month:
- The recovery in “high-contact services” continues, as Canadians are taking flights (air transport, +5.5%), attending shows (arts, entertainment and recreation, +2.2%), and dining out at restaurants (food services and drinking places, +2.1%).
- The public sector grew by 0.4%, led by the federal government (1.0%), while the health care sector (0.3%) responded to additional demand coming from the triple-whammy of COVID-19, respiratory syncytial virus and flu cases.
- Wholesale trade (+1.3%) was active, reflecting the processing of new COVID variant boosters as well as farming products, which are supporting strong agricultural exports of wheat and canola this year.
- Oil sands extraction fell by 3.9% due to scheduled maintenance that interrupted production.
- Manufacturing (-0.7%) suffered its fourth decline in six months, falling to the lowest output level since December 2021.
Summary Table
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