Canada’s economy shrank by a greater-than-expected 0.3% in October, the largest drop in almost three years, but is expected to stage a partial recovery in November, official data showed today.<\/p>\n
Analysts had forecast growth would dip by 0.2% from September as the economy continues to adjust to US trade measures. Statistics Canada said initial data indicated GDP would grow by 0.1% in November.<\/p>\n
The month-on-month fall was the largest since the 0.3% decline seen in December 2022. The goods sector fell 0.7% while services contracted by 0.2%.<\/p>\n
Bank of Canada Governor Tiff Macklem said on December 10 that he expected weak fourth quarter growth.<\/p>\n
Money markets are predicting the Bank of Canada’s next move will be a 25 basis point hike, most likely in July 2026.<\/p>\n
“This is unlikely to materially change the outlook for monetary policy,” said Stephen Brown, deputy chief North America economist at Capital Economics.<\/p>\n
“Nonetheless, the economy’s lack of momentum reinforces our view that markets have gotten ahead of themselves in terms of pricing in interest rate hikes for next year,” he added.<\/p>\n
The manufacturing sector dropped by 1.5%, partly reflecting a 6.9% plunge in machinery output. Wood product manufacturing dropped by 7.3%, the largest decline since April 2020, following additional US tariffs introduced on October 14.<\/p>\n
Services-producing industries were hit by a nationwide work stoppage by Canada Post workers and a teachers’ strike in the province of Alberta.<\/p>\n
“The Canadian economy is skating on thin ice in Q4 – we expect weak underlying momentum to carry through H1 2026,” said Michael Davenport, Senior Canada Economist at Oxford Economics.<\/p>\n
The Bank of Canada held its key policy rate steady at 2.25% on December 10. Macklem, noting the economy was proving resilient overall to tariffs, said the rate was at the right level to keep inflation close to the bank’s 2% target.<\/p>\n","protected":false},"excerpt":{"rendered":"Canada’s economy shrank by a greater-than-expected 0.3% in October, the largest drop in almost three years, but is…\n","protected":false},"author":2,"featured_media":145150,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-207422","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/207422","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=207422"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/207422\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/145150"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=207422"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=207422"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=207422"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}