- Benjamin Reitzes, senior economist at BMO Capital Markets
The Canadian economy grew in November amid an increase in oil and gas extraction, as well as robust wholesale and retail trade, Statistics Canada reported. Canada's gross domestic economy rose 0.3% in the reported month, marking the first growth in three months. The nation's GDP was flat in October, and declined 0.5% in September. Oil and gas extraction soared 2.1%, recovering from a slump in September and anaemic growth in October following production problems and maintenance shutdowns. Retail trade increased 1.2% with gains in nearly all of the trade groups, while the wholesale trade segment climbed for the first time in five months, rising 1.3%, amid increased demand for building materials and supplies. When measured on an annual basis, the Canadian economy climbed 0.2%.
The positive monthly advance is projected to be short-lived, with the fourth quarter numbers likely to stall. Earlier in January, the Bank of Canada downwardly revised 2015 fourth quarter growth to 0% from 1.5% on a yearly basis. The BoC significantly revised down other quarters as well: 2016 Q1 has been lowered to 1%, while 2016 Q2 is now predicted at 2.2% instead of 2.5%. Overall, Canada's economy is estimated to expand just 1.5% in 2016 and 2.5% in 2017. As a result, Canada is unlikely to close the output gap until the end of 2017.
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