Analysts had predicted that growth would dip by 0.2 per cent ahead of the release The Canadian economy shrank by a greater-than-expected 0.3 per cent in October, the largest drop in almost three years, on weakness in both the goods and services sectors, official data showed on Tuesday.
Analysts had forecast that growth would dip by 0.2 per cent from September as the economy continues to adjust to U.S. trade measures.
Last month, Statistics Canada reported 0.2 per cent GDP growth for September, and Canada avoided a technical recession largely due to a surge in defence spending.
The month-on-month fall was the largest since the 0.3 per cent decline seen in December 2022. The goods sector fell 0.7 per cent in October, while services contracted by 0.2 per cent.
But a lookahead at the data for November indicated that gross domestic product would grow by 0.1 per cent in that month, allowing for some recovery. The figures are unlikely to overly concern the Bank of Canada. Governor Tiff Macklem said on Dec. 10 that he expected GDP growth to be weak in the fourth quarter. Money markets are predicting the central bank’s next move will be a 25-basis-point hike, most likely in July 2026. The manufacturing sector dropped by 1.5 per cent, partly reflecting a 6.9 per cent plunge in machinery output. Wood product manufacturing dropped by 7.3 per cent, the largest decline since April 2020, following additional U.S. tariffs that came into force on Oct. 14…Source: cbc.ca/news
