Canada's GDP rose 0.5 percent in July, slightly above the analysts' consensus. As expected, the continuing recovery in the Alberta oil sands industry, in the wake of May's devastating forest fires, led the expansion. Economists at TD Bank are estimating that growth for Q3 as a whole will be at a 3 percent annual rate, which they hyperbolically describe as a "barn burner". Of course, if the Bank of Canada is right and the economy's potential growth is now as low as 1.5 percent annually, that may indeed be as good as things are likely to get.
For sure, growth will slow in the final quarter of the year, with oil sands output back to normal and other sectors struggling to gain traction. One small puzzle in today's data is the 0.8 percent decline in construction activity. The rebuilding activity in the Fort McMurray area may boost that sector in the coming months, although the impact on national GDP growth should not be overestimated. What's more surprising is that, with housing prices at astonishing levels in Toronto and Vancouver, and with interest rates set to remain at rock-bottom levels far into the future, residential construction activity is generally sluggish. That may be offset by strength in non-residential construction as the Federal infrastructure program speeds up.
The numbers today are generally good, but will Canadians actually find out about them? In keeping with their usual practice of focusing on the economy only when they can put the word "recession" in the headline, the major media outlets are giving the story as little coverage as possible. That story on the CBC website I linked to at the start? It's the fifth of five items in the Business section of the home page -- and that section is way down at the bottom. Apparently the national broadcaster thinks Canadians need to know about Donald Trump's latest piece of appalling behaviour, rather than what's going on in their own backyard.
No comments:
Post a Comment