Statistics Canada says economy grew 0.4 per cent in August
OTTAWA _ Statistics Canada says the economy grew 0.4 per cent in August before apparently flatlining in September to close out the third quarter of the year.
Leading the way in August was a rise in activity in accommodation and food services, retail trade and air travel, all of which have been hit hard by COVID-19 and helped by easing of public health restrictions.
Weighing down the economy in August was the country’s agriculture sector, which posted its second straight monthly decline that Statistics Canada notes were the largest back-to-back monthly contractions since it began collecting comparable data in 1997.
The agency is providing a preliminary estimate for September that suggests real gross domestic product was essentially unchanged for the month.
Statistics Canada says gains in several sectors were more than offset by a significant drop in manufacturing and decline in retail trade, hinting at the supply-chain bottlenecks that have weighed on growth.
The estimate for September suggests the economy grew at an annual rate of 1.9 per cent in the third quarter, but that figure could change once the agency finalizes figures next month.
Statistics Canada says total economic activity in August was about one per cent below pre-pandemic levels recorded in February 2020, a gap that didn’t change in September.
TD Bank senior economist Sri Thanabalasingam says closing that remaining gap could be challenging because global supply-chain disruptions and labour market imbalances could crimp output across sectors for months to come.
On Wednesday, the Bank of Canada revised down its projection for growth in the third quarter of the year to 5.5 per cent from an annualized rate of 7.3 per cent in its previous forecast.
“With supply constraints expected to continue to weigh on the economy through the fourth quarter, output may fall well short of the Bank of Canada’s projection,” Thanabalasingam writes in a note.
“Indeed, with today’s release, the bank may need to, once again, adjust its narrative on the Canadian economy.”