Canada’s economy was still growing in October, but the pace of that growth is slowing heading into 2023, Statistics Canada says.
The federal agency said Friday that real gross domestic product grew by 0.1 per cent in October, but its early estimate for November indicates little change for that month.
Revised figures from September showed a bump of 0.2 per cent for the economy.
Services growth of 0.3 per cent in October — led by the public sector, wholesale and client-facing sectors — was slightly offset by a 0.7 per cent decline from the goods-producing industries.
Statistics Canada says the performing arts, spectator sports and heritage institutions industries grew by 4.7 per cent amid more Toronto Blue Jays games than usual in October and a late start to the NHL pre-season.
The agency says the cool down in the goods-producing industries in October was led by a decrease in mining, quarrying, and oil and gas extraction and weakening in the manufacturing sector.
TD Bank senior economist James Orlando said Friday’s report is in line with the bank’s expectations for one per cent annualized growth in the fourth quarter of the year.
But BMO senior economist Robert Kavcic questioned whether those results can hold up to the weight of the Bank of Canada’s rapid interest rate increases, which have surged four percentage points since the start of the year in an attempt to slow the economy and take the steam out of inflation.
“The Canadian economy has been holding up relatively well overall heading into the end of 2022, largely because the service sector is now carrying the weight,” he wrote in a note to clients Friday.
“But the real question will be how things shake out during the first half of next year, when aggressive Bank of Canada rate hikes start to more fully work their way through the system.”
Orlando said the slowing of growth in Friday’s report suggests still-high inflation and rising interest rates are causing Canadians to “gradually tighten their purse strings.”
— with files from The Canadian Press