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Canada's economy picks up speed in November
 
 
January 29, 2010
 
Canada's economy grew more than expected in November, Statistics Canada 
reported Friday, led by the goods and services sectors.
 

OTTAWA � Canada's economy grew more than expected in November as the 
wholesale, oil and mining sectors helped accelerate the pace of 
recovery.

Gross domestic product rose 0.4 per cent during the month, the third 
consecutive monthly increase, Statistics Canada reported Friday. It 
also revised GDP for October to 0.3 per cent from 0.2 per cent and 
September's growth to 0.5 per cent from 0.4 per cent.

"As was the case in September and October, most major industrial 
sectors increased their production," it said.

"Mining and oil and gas extraction, and wholesale trade accounted for 
about 60 per cent of the overall growth," the agency said.

Economists had expected growth of between 0.1 and 0.3 per cent in 
November.

"The Canadian economy does indeed appear to be gathering momentum, 
despite some recent disappointments on the employment front," said 
Douglas Porter, deputy chief economist at BMO Capital Markets.

"While much of the growth in November was concentrated in a few 
sectors, most industries were on the plus-side as the recovery broadens 
and puts down firmer roots."

Canada recorded a 0.1 per cent gain in the third quarter, ending a 
three-quarter recession that began in late 2008. Fourth-quarter GDP 
results are to be reported March 1.

Millan Mulraine, economics strategist at TD Securities, said Friday's 
data "suggest a significant pickup in the pace of Canadian GDP in the 
last quarter of the year as the Canadian economy shifted up a gear or 
two."

"In the coming months, the Canadian economic recovery should remain 
intact as the significant monetary and fiscal policy stimulus 
administered to the Canadian economy gathers traction, though the 
recovery is likely to remain both slow and fragile."

Statistics Canada said goods-producing industries were up 0.6 per cent 
in November, while the services sector increased 0.4 per cent. The 
mining sector gained 1.8 per cent � led mainly by oil and gas 
extraction. Wholesale activities rose 2.4 per cent, with the biggest 
increases recorded in food products, motor vehicles and building 
supplies.

Meanwhile, a report Friday showed the U.S. economy grew at a bigger-
than-expected 5.7 per cent in the fourth quarter � the fastest pace 
since 2003. That followed a 2.2 per cent annual rate of growth in the 
third quarter.

On Tuesday, the International Monetary Fund raised its 2010 growth 
outlook for Canada to 2.6 per cent from its previous estimate of 2.1 
per cent.

The IMF projection is close to the Bank of Canada's forecasts of 2.9 
per cent expansion this year. The IMF's outlook for Canada in 2011 is 
unchanged at 3.6 per cent, which is in line with the central bank's 3.5 
per cent outlook.

"Canada was doing better than we were earlier led to believe, and that 
has GDP taking aim at a healthy four per cent pace for the fourth 
quarter of 2009," said Avery Shenfeld, chief economist at CIBC World 
Markets Inc.

"Upward revisions to September and October growth rates, alongside a 
surprising 0.4 per cent rise in November GDP, didn't quite put Canada 
on par with its American neighbours, but finally put production into 
better line with job gains over the past five months."

The IMF also upgraded its U.S. outlook for 2010 to 2.7 per cent, but 
downgraded the forecast in 2011 to 2.4 per cent.

"This is one of the most convincing signs that the recovery is for real 
that we have seen so far, and neatly dovetails with the robust U.S. GDP 
result," said BMO's Porter.