Shipping containers are seen at the Fairview Cove Container Terminal in Halifax on Friday, Aug. 25, 2017. THE CANADIAN PRESS/Andrew Vaughan

GDP growth of 0.4% in Oct. offers glimmer of hope for economy in 2021

GDP growth of 0.4% in Oct. offers glimmer of hope for economy in 2021

OTTAWA — The Canadian economy outpaced expectations in October and an early estimate suggested growth continued in November, offering a glimmer of hope for a better-than-expected start to 2021.

Statistics Canada reported Wednesday that real gross domestic product grew 0.4 per cent in October, marking the sixth consecutive month of growth and slightly above the average economist estimate of a 0.3 per cent gain.

Both goods-producing and service-producing sectors were up overall in October, with almost every sector outside of those directly affected by renewed public health restrictions posting gains.

The October figures put the Canadian economy about four per cent below where it was before the COVID-19 pandemic, Statistics Canada said.

The gain in October would be modest in any other year, BMO chief economist Douglas Porter said, but the increase looks pretty good during a historically difficult year for the Canadian economy.

There was some belief the economy could contract in November as lockdown restrictions took hold in places like Toronto, he said. StatCan’s preliminary estimate for the month is for a 0.4 per cent GDP gain.

“It does mean that the economy is able to keep churning ahead during this very tough episode,” Porter said. “Frankly, it gives me a bit of confidence that things might hold during the tough winter.”

It may also mean 2020 won’t be as bad for the Canadian economy as previously expected, he said.

Economic activity plunged in March and April during the outset of the pandemic, and sectors have been climbing back ever since. What has happened since is a tale of two economies: One where circumstances have improved, the other where things continue to lag.

Statistics Canada said manufacturing, while a drag on growth in October with a 0.8 per cent decline following five months of growth, was a main driver of the preliminary estimate for November growth.

RBC senior economist Nathan Janzen said the sector has been impacted less by health restrictions, here and abroad.

On the other hand, accommodation and food services dropped in October by 3.9 per cent drop, marking the second straight month of declines and falling in line with the temperature as the outdoor dining season effectively came to a close.

The two sectors still remain 31 per cent and 44 per cent below where they were in February, and are almost certain to show declines in November, Janzen said.

The path into the new year will rest on how quickly containment measures are lifted, linked in part to the rollout of vaccines that got a boost on Wednesday as Health Canada approved a second COVID-19 vaccine for use in this country.

“We know that the second half of 2021 could look significantly better,” Janzen said in an interview.

“Households have been building up huge stock of savings and a lot of that is just because a lot of things — travel and hospitality services — just haven’t been available for purchase.”

This report by The Canadian Press was first published Dec. 23, 2020.

Jordan Press, The Canadian Press

Just Posted

An anti-lockdown protest went ahead outside a café in central Alberta on Saturday, despite pouring rain and a pre-emptive court injunction.  (Photo by The Canadian Press)
Four people ticketed after hundreds attend anti-lockdown rally at central Alberta cafe: RCMP

MIRROR, Alta. — RCMP say they ticketed four people after an anti-lockdown… Continue reading

file photo
PM tells Canadians to prepare for one-dose summer, two-dose fall

Chief Public Health Officer says 75 per cent getting first dose is target to avoid fourth wave

Chris Scott, owner of the Whistle Stop Cafe, speaks during a rally against measures taken by government and health authorities to curb the spread of COVID-19 at his cafe in Mirror on Saturday. The Whistle Stop was shut down by AHS for not complying with COVID-19 rules. (Photo by The Canadian Press)
Central Alberta café owner and COVID-19 protester released from custody

Chris Scott was arrested at protest rally outside his cafe on Saturday

Some companies are offering rent-a-chickens for urban people who are wanting to source fresh eggs. (Black Press file photo).
Rent-a-chickens offered to Red Deerians who are afraid of commitment

More people are taking on ‘eat local’ projects during the pandemic

Free items can be left in front of homes during this weekend’s Kick it to the Curb event. (File photo by Advocate staff)
Kick It to the Curb runs this weekend in Red Deer

Unwanted items can be left by the curb this weekend in Red… Continue reading

Alberta Premier Jason Kenney. THE CANADIAN PRESS/Jason Franson
Here is a list of latest COVID-19 restrictions in effect in Alberta

New mandatory health restrictions are now in effect in Alberta. Additional restrictions… Continue reading

In this Wednesday, Dec. 4, 2019 file photo, British Prime Minister Boris Johnson, left, welcomes Canadian Prime Minister Justin Trudeau during official arrivals for a NATO leaders meeting at The Grove hotel and resort in Watford, Hertfordshire, England. THE CANADIAN PRESS/AP/Francisco Seco
U.K. eyeing fall for start of detailed trade deal talks with Canada, minister says

OTTAWA — Britain’s trade minister says his country expects to kick-start talks… Continue reading

lumber
‘It is a gold mine:’ Builders warned of rising lumber thefts across Canada

The skyrocketing cost of lumber is fuelling a trend that has authorities… Continue reading

The first Pfizer-BioNTech COVID-19 vaccine dose in Canada is prepared at The Michener Institute in Toronto on Monday, Dec. 14, 2020. THE CANADIAN PRESS/Frank Gunn
Nunavut working to get Pfizer vaccine for territory’s teens

Nunavut’s chief public health officer says the government is working to get… Continue reading

A vial of the Oxford-AstraZeneca vaccine against COVID-19 at a hospital in Sofia, Sunday, Feb. 7, 2021, prior to the start of vaccination. THE CANADIAN PRESS/AP-Valentina Petrova
Questions remain about the future of the Oxford-AstraZeneca shot in Canada

Questions remained Wednesday about the future of the Oxford-AstraZeneca vaccine in Canada… Continue reading

Tampa Bay Lightning goaltender Andrei Vasilevskiy (88) celebrates with defenseman Victor Hedman (77) after the team defeated the Dallas Stars during an NHL hockey game Wednesday, May 5, 2021, in Tampa, Fla. (AP Photo/Chris O’Meara)
Analysis: McDavid NHL’s MVP front-runner in condensed season

Edmonton Oilers captain Connor McDavid has 100-plus point season

Toronto Maple Leafs goaltender Jack Campbell (36) makes a save as Maple Leafs defenceman TJ Brodie (78) and Montreal Canadiens forward Tyler Toffoli (73) look for the rebound during first period NHL hockey action in Toronto on Saturday, May 8, 2021. The Leafs and the Canadiens will meet in the playoffs for the first time in 42 years when the 2020-21 NHL post-season gets underway.THE CANADIAN PRESS/Nathan Denette
Singer Celine Dion performs during her first World Tour show called Courage Wednesday, September 18, 2019 at the Videotron Centre in Quebec City. THE CANADIAN PRESS/Jacques Boissinot
Songbird Uncaged: Celine Dion readies return to Las Vegas stage for 10-date run

Starting on Nov. 5, Dion will play 10 dates at the Resorts World Las Vegas theatre

Most Read