The Canadian economy grew by 0.4 per cent in November, Statistics Canada reported Wednesday, in a report that matched the expectations of most economists.
The November reading on the country’s gross domestic product marked a rebound from the flat figure seen in October.
“November was a warm month as far as temperature is concerned, and was hot for Canadian output as well,” CIBC economist Nick Exarhos said in a commentary.
Statistics Canada said 17 of 20 industrial sectors posted increases for the month, with goods-producing industries up 0.8 per cent after declining 0.5 per cent in October.
“November’s gain was mainly due to increases in the manufacturing and mining, quarrying and oil and gas extraction sectors, partly as a result of restoration in production capacity,” the federal government agency reported.
The manufacturing sector was up 1.8 per cent in November, marking its largest monthly increase since February 2014.
After four consecutive monthly declines, which saw motor vehicle manufacturing drop by 21.5 per cent, the industry rose 14.3 per cent in November. Automotive vehicle assembly increased in part due to the return to production of some plant capacity following shutdowns in September and October.
Meanwhile, services-producing industries rose 0.3 per cent, led by the real estate and rental and leasing, wholesale, and retail trade sectors.
Exarhos said the strong pace to November growth only puts the economy in the range of roughly two per cent growth for the fourth quarter, which he said is slightly under the Bank of Canada’s 2.5 per cent forecast.
“All told, not much to move markets, although broadbased [U.S dollar] weakness ahead of the Fed this afternoon could see the loonie gain some ground during this morning’s trading session,” he said.
In the wake of Wednesday’s GDP release, the Canadian dollar was trading higher. The loonie was up 0.31 of a U.S. cent at 81.43 cents US.
TD senior economist Brian DePratto said in a commentary that the Bank of Canada “will undoubtedly be encouraged by today’s report, not least as it confirms their most recent economic growth tracking.”
“Confirmation does not mean a change in view however, and today’s report does little to change the notion that the balance of economic fundamentals [versus] risks suggests July is the most likely timing for the next rate increase,” he said.
The Bank of Canada’s next scheduled date for a decision on interest rates is March 7.