Canada’s gross domestic product in November rose by 0.6%, surpassing the pre-pandemic level by 0.2% thanks to growth across almost all sectors of the economy, according to data released by Statistics Canada on Tuesday.
November’s strong growth can be credited to Canada’s high vaccination rates. With nearly 80% of the population fully vaccinated, Canada has one of the highest vaccination rates in the world, allowing for the safe reopening of businesses and the resumption of economic activities.
After an uneven recovery for most of the year, we now see widespread growth in both the goods-producing (0.5%) and services-producing (0.6%) sectors.
In-person services all had considerable gains as establishments could finally open at full capacity. Accommodation and food services rose by 3.4%, while the arts, entertainment and recreation sector expanded by 5.4%.
Wholesale trade grew by 2.8%, of which building materials and supplies grew by an impressive 7% amid strong international demand.
Within the goods-producing sector, agriculture had a 5.5% increase as farmers prepared for next year’s crops. The mining, quarrying, and oil and gas extraction sector contracted by 1.8%, however, because of a plateau in oil production and disruptions to coal mining in British Columbia caused by floods and landslides.
December and January will have little growth if not a slight contraction in the economy as omicron-induced restrictions, most notably in Ontario and Quebec, reduced in-person activities. First-quarter growth will be slow, although February might have a slight uptick as some restrictions are lifted and people are eager to get out again.
The takeaway
Still, this slowdown is not a cause for concern since growth will simply be delayed to the second quarter. Consumer demand and global energy demand remain strong. The barriers to growth remain supply chain bottlenecks, and increasingly, the talent shortage that will prove to be chronic rather than acute throughout the year.
