Manufacturing and Trade Drive Growth
After struggling to grow throughout the last three quarters of 2023, Canada’s economy is showing a bit more vitality so far this year. The latest numbers from Statistics Canada show that the country’s GDP grew by 0.3% in April, driven mainly by growth in manufacturing, wholesale trade, the oil and gas industry, and construction.
Key Takeaways
- Canadian economy grows 0.3% in April
- Manufacturing grows 0.4% after retracting 0.6% in the first quarter of this year
- Retail trade improves with a 0.5% increase following two consecutive months of decline
- Oil and gas sector sees a boost ahead of the opening of the Trans Mountain pipeline expansion on May 1
Bank of Canada’s Forecast
According to Bank of Canada chief economist Douglas Porter, "After struggling to grow at all through the last three quarters of 2023, the Canadian economy is showing some signs of life so far this year."
Porter also noted that while growth in April was good, not great, particularly when viewed in the context of a strong labour force and population growth. He said, "We continue to view next week’s employment data, and next month’s CPI figures, as more important in determining whether the Bank of Canada will trim interest rates by a further 25 basis points at the late-July meeting."
Economists’ Predictions
Economists are now predicting slower population growth in 2024 after Canada had record-setting population gains last year. Steady job growth and robust population gains have been one of the main factors helping lift the economy. However, GDP per capita has seen a decline for six of the past seven quarters.
According to Pedro Antunes, chief economist of the Conference Board of Canada, "The slowdown in population growth, combined with continued financial stress on consumers, means monetary policy will have an even more substantial impact on Canadian households."
What’s Next?
As we look ahead to the rest of 2024, it’s clear that the Canadian economy is facing some challenges. However, with the right policies and support from both government and industry leaders, there are many reasons to be optimistic about Canada’s economic future.
By staying informed, investing in education and innovation, and promoting sustainable growth, we can help ensure a bright economic future for all Canadians.
Sources:
- Statistics Canada
- Bank of Canada
- Conference Board of Canada
Additional Resources:
