Scotia increases Q4 growth estimate

By James Langton | January 6, 2022 | Last updated on January 6, 2022
2 min read

Fourth-quarter GDP estimates from Scotia Economics edged higher following an upside surprise in November trade data.

Statistics Canada reported that merchandise trade grew in November despite the flooding in British Columbia that was expected to cause disruptions as the port of Vancouver was temporarily shuttered.

“What actually happened was that record trade with the U.S. in November more than offset the unexpectedly small impact on trade with other countries through the Port of Vancouver,” Scotiabank said in a research note on Thursday.

Both exports and imports rose month over month, and the merchandise trade surplus grew to $3.1 billion in November from $2.3 billion in October.

As a result, Scotia’s forecasting model raised expectations for fourth-quarter GDP growth to 6.2% from its previous reading of 6.06%.

“While StatsCan warned that merchandise trade flows might continue to suffer from transportation issues in December, it is safe to say that the feared collapse in trade failed to materialize,” Scotia said in its note.

“This means that the economy entered into the Omicron holiday season with slightly more strength than we anticipated, but given the rise in cases and hospitalizations and the re-imposition of public health measures across provinces, the outlook for January is bleak,” it cautioned.

TD Economics said it’s expecting to see some volatility in trade data in the months ahead.

“Continued strength in manufacturing sentiment south of the border, alongside robust commodity prices and demand, bode well for exports,” TD said in a research note on Thursday. “However, the global omicron wave may prolong supply chain pressures during the first quarter this year as consumers reorient spending back towards goods.”

Additionally, labour shortages could also hamper trade in the short term, TD said.

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James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.