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Canada GDP Surprises... but Rates Stay High?

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Statistics Canada released GDP figures this morning. Surprisingly the economy grew by 0.2%, despite expectations of negative growth. After several month of no growth, this is a positive surprise... although with some downside, see below.

Looking at the chart, you can see a slowdown in key industries. Construction is shrinking as high rates weight on the market; tech and media are on the downswing after over-extending during the pandemic; and banks are starting to cut back. But regardless of headwinds on Bay St and Silicon Valley, it’s a picture of robust growth on ”main street”: hospitality, retail, real estate and logistics are all up well above the overall average of +1.1% annually. 

However, there’s one downside to this unexpected growth: this may slow down rate cuts, as the Bank can point to growth in spite of high rates. Doug Porter of BMO concluded GDP growth ”affords policymakers the ability to gently push back on easing chatter, as they wait for underlying inflation to come down further.” 

Canada GDP Surprises

Summary
GDP growth was mildly positive for November, and saw significant annualized gains in retail, logistics, hospitality and real estate. 


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Adam Jacobs

Head of Research | Canada

Toronto Downtown

Colliers Canada's head of research, leading a cross-country team of 20 mapping, analytics and research professionals. Formerly head of Canada research at Cushman Wakefield and Director of Analytics at Oxford Properties. Featured in mainstream publications such as the Toronto Star, industry publications and podcasts. Specializing in the big picture and the fundamentals driving real estate - demographics, the macro environment and the global economy. 

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