| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | 0.2% | 0.0% | 0.2% | |
| Year over Year | 1.1% | 1.1% | 0.8% |
Highlights
Canada's economic activity stalled in December, below Econoday's consensus of a 0.2 percent increase, following a 0.2 percent increase in November. The advance estimate for January points to a 0.4 percent rebound.
The flat performance came even as activity increased in 14 of 20 sectors.
Good-producing industries declined 0.2 percent after expanding 0.7 percent in November. Gains in agriculture, forestry, fishing and hunting (2.6 percent) and mining, quarrying, and oil and gas extraction (1.5 percent) where not enough to offset declines elsewhere: manufacturing decreased 0.4 percent, construction was down 0.6 percent and utilities down 3.6 percent. Both energy and industrial production contacted 0.3 percent.
Services were flat for a second consecutive month. Weakness in educational services, down 3.8 percent, and healthcare and social assistance, down 0.2 percent, overshadowed gains in several other sectors. Retail trade was up 0.7 percent, wholesale trade increased 0.5 percent, real estate, and rental and leasing was up 0.6 percent, and finance and insurance increased 0.8 percent as market sentiment improved. Public administration edged up 0.1 percent.
GDP growth increased 0.2 percent in the fourth quarter. For 2023 as a whole, GDP by industry expanded 1.2 percent, its slowest pace since 2016 outside of a contraction in 2020.
The flat performance came even as activity increased in 14 of 20 sectors.
Good-producing industries declined 0.2 percent after expanding 0.7 percent in November. Gains in agriculture, forestry, fishing and hunting (2.6 percent) and mining, quarrying, and oil and gas extraction (1.5 percent) where not enough to offset declines elsewhere: manufacturing decreased 0.4 percent, construction was down 0.6 percent and utilities down 3.6 percent. Both energy and industrial production contacted 0.3 percent.
Services were flat for a second consecutive month. Weakness in educational services, down 3.8 percent, and healthcare and social assistance, down 0.2 percent, overshadowed gains in several other sectors. Retail trade was up 0.7 percent, wholesale trade increased 0.5 percent, real estate, and rental and leasing was up 0.6 percent, and finance and insurance increased 0.8 percent as market sentiment improved. Public administration edged up 0.1 percent.
GDP growth increased 0.2 percent in the fourth quarter. For 2023 as a whole, GDP by industry expanded 1.2 percent, its slowest pace since 2016 outside of a contraction in 2020.
Market Consensus Before Announcement
Another 0.2 percent rise in December, which would match November's gain, is the consensus.
Definition
Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. In contrast to most industrialised countries a monthly estimate is provided derived from the value added by labour and capital in transforming inputs purchased from other producers into that industry's output. Data for the reference month are usually released close to the end of the second month after the reference period.
Description
Instead of producing an advanced quarterly GDP figure and revising it the following two months, Statistics Canada releases monthly estimates of real GDP at Basic Prices. This release breaks down real output by seven goods-producing industries and twelve service-producing industries, and includes special aggregations such as business sector, non-business sector, and industrial production.
The sources of data used for monthly and quarterly estimates often differ and leads to very different estimates for certain items, such as price deflators. As a result, the monthly figures are not perfectly correlated with the quarterly numbers. However, the monthly data do give some idea of where the quarter is headed and especially in an uncertain environment, they are closely watched. While industrial production is closely watched in the U.S., it is not in Canada especially since the economy has become increasingly dominated by services. However, the goods sector is more vulnerable to wide swings in output compared to services, and exports remain dominated by industrial output.
The sources of data used for monthly and quarterly estimates often differ and leads to very different estimates for certain items, such as price deflators. As a result, the monthly figures are not perfectly correlated with the quarterly numbers. However, the monthly data do give some idea of where the quarter is headed and especially in an uncertain environment, they are closely watched. While industrial production is closely watched in the U.S., it is not in Canada especially since the economy has become increasingly dominated by services. However, the goods sector is more vulnerable to wide swings in output compared to services, and exports remain dominated by industrial output.
