Canada’s economic output is almost back to its pre-pandemic level.
Real GDP on an annualized basis was $2.0 trillion in October, up by 0.8% from $1.99 trillion in September, Statistics Canada reported Thursday.
In February 2020, real GDP stood at nearly $2.01 trillion on an annualized basis. Then on March 11, the World Health Organization declared Covid-19 a pandemic. The following month, Canada’s annualized GDP dropped to $1.66 trillion. (All figures are seasonally adjusted and in 2012 chained dollars.)
By October 2021, GDP had risen by 3.8%, up from $1.93 trillion in October 2020, StatsCan reported Dec. 23.
“Advance information indicates that real GDP increased 0.3% in November [over October]. Leading the growth were accommodation and food services, wholesale trade, construction and the arts and entertainment sectors, while the mining, quarrying, and oil and gas extraction sector offset some of the gains,” StatsCan said.
“The advance estimate for November showed an increase in GDP of 0.3% which, while a little disappointing relative to industry data received in the past week, is still a solid result given the flooding seen in [British Columbia] during the second half of the year,” wrote Andrew Grantham, senior economist with CIBC Capital Markets, in a note released Thursday.
StatsCan reported Thursday that October’s annualized output in mining, quarrying, and oil and gas extraction was $165 billion, up by 18.6% from $139 billion in October 2020 and up by 1.5% from $162 billion in September 2021.
“Oil sands extraction was up 3.9% as strong increases in crude bitumen and synthetic crude production in Alberta led the growth,” StatsCan said of that sector’s month-over-month increase in GDP. “Robust global demand, prices for energy products and the completion of planned maintenance activities at some oil sands upgraders contributed to the increase. Oil and gas extraction (except oil sands) contracted 1.8% as higher natural gas extraction was more than offset by lower crude petroleum extraction, particularly off of Canada’s North Atlantic coast.”
Output in arts, entertainment and recreation jumped 33.7%, to $11.4 billion in October 2021 from $8.6 billion in October 2020. Month over month, GDP in arts, entertainment and recreation was up by 7.1%.
Industrial production output was $387 billion in October, up by 1.6% from $381 billion in September and up by 6% year over year.
“Growth in October was broad-based, with the largest single contribution coming from the manufacturing sector which rebounded following a prior month decline,” Grantham wrote.
Another gain in November would mark six straight months of economic expansion. Statistics Canada will finalize November’s figures in early February.
Grantham said that even after accounting for the possibility of a modest pullback in December, GDP is still running modestly ahead of the Bank of Canada’s forecast of economic growth in the quarter at an annual rate of 4%.