Statistics Canada released Tuesday morning its latest snapshot of how the Canadian economy is getting on. The key takeway: the country’s economy is one again growing (at least on a quarterly basis, see below), generating jobs and generally providing improved wages for workers.
Still, the continued weakness in oil amid a general slide in commodity prices remains a key concern, and will likely keep growth restrained well into 2016, the majority suggests. Here’s five things to know about Canada’s economy right now:
Recession in rearview
A mild economic contraction through the first six months of the year is officially behind us, Tuesday’s data release showed.
“The Canadian economy was able to snap back to life in the third quarter, leaving the short and shallow recession that marked the start of the year firmly in the rearview mirror,” Brian DePratto, an economist at TD Bank, said.
MORE: ‘Best. Recession. Ever.’
Exports, finally
Exports of autos and other goods pitched in in a big way last quarter – a sorely needed development that suggests manufacturing is at last moving to fill the void left by oil and resource firms who are pulling back.
Exports surged 9.4 per cent between July and September, Statscan said.
“The double-double of a weaker loonie and stronger U.S. demand finally kicked into gear,” Doug Porter, chief economist at BMO, said.
Consumers upbeat
Despite towering debt levels, consumers are still providing a critical support for the economy. Household consumption was up 1.8 per cent, Statscan said. “Consumer spending keeps doing its thing,” Porter said.
‘It’s debatable how much longer households can keep this up’
Still, personal savings rates are falling again, while many suggest the era of rock-bottom interest rates is coming to an end soon. Some suggest consumers are approaching a serious slowdown ahead.
“It’s debatable how much longer households can keep this up,” David Madani, economist at Capital Economics said.
Building booms
Canada’s housing boom is also helping to prop things up. Growth in residential housing investment (homes, condos, etc) has re-accelerated to 2.5 per cent, Statscan said.
MORE: The Great Canadian Housing Boom
“This is a bit of a worry considering the already elevated level of construction and signs of overbuilding,” Madani said.
“This latest data suggest that the economy is still overly dependent on housing investment and household borrowing as sources of growth,” the economist said.
Like a lamb
Despite the quarterly gain, the three-month stretch ended with a whimper with the economy contracting 0.5 per cent in September thanks to a pullback in business investment in a range of areas among other factors, Statscan said.
“Despite a strong quarterly number, the September GDP by industry data provides a warning sign that the third quarter performance is not likely to be repeated,” TD’s DePratto said.
“The 0.5 per cent contraction in September illustrates that the economy isn’t out of the woods,” added Madani.
WATCH: Canada is on a slow path to economic recovery amid sluggish oil prices. Eric Sorensen reports.
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