AUS
NZ
UK
CA
USA
IND
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Summary
- The latest GDP growth comes after a decline of 11.3 per cent in the second quarter and that of 1.9 per cent the first quarter this year.
- There was a rebound of 13 per cent in household spending and that of 30.2 per cent in housing investment in Q3 2020, reported StatCan.
- In spite of the surge, Canada’s real GDP in the latest quarter is still down 5.3 per cent from that of the fourth quarter in 2019.
Canada’s real gross domestic product (GDP) increased by about 8.9 per cent in the third quarter of 2020, reported Statistics Canada. This growth comes after a decline of 11.3 per cent in the second quarter and that of 1.9 per cent the first quarter this year.
The country’s domestic demand spiked 10.8 per in the third quarter. This, too, is a growth after a drop of 11.4 per cent Q2 2020 and that of 1.6 per cent in Q1 2020.
But in spite of the surge, Canada’s real GDP in the latest quarter is still down 5.3 per cent from that of the fourth quarter in 2019.
The latest GDP growth is reflective of the economy reopening around August and September after months-long lockdown across the country. The GDP was also majorly influenced by significant improvements in housing investment, housing spending and business expenditures.
CANADA’S HOUSING SPENDING RECOVERS
The country spotted a 13 per cent rebound in household spending in Q3 2020, following a slump of 13.6 per cent in the second quarter of 2020 and that of 2.6 per cent in Q1 2020.
In comparison to the levels in Q4 2019, Canada’s household spending was down 5 per cent in the third quarter of 2020.
While outlays for durable goods rocketed by 38 per cent in Q3 2020, the steepest climb on record, outlays for non-durable goods rose about 4.4 per cent.
Services-related household spending remained 12.4 per cent lower against that of the fourth quarter of 2019.
Household disposable income, meanwhile, dwindled by 3.1 per cent in Q3 2020.
CANADA’S HOUSING INVESTMENT HITS RECORD HIGH
After tumbling 15 per cent in Q2 2020, housing investment jumped about 30.2 per cent in the latest quarter. Compared to Q4 2019, the country’s housing investment increased by 10.3 per cent.
The improvement in the numbers was driven by ownership transfer costs, which was up a whopping 109.5 per cent, and by renovations, which jumped 17.7 per cent.
The increase in housing investment in the latest quarter overlapped with low mortgage rates, better shape of the job market and higher compensation of employees, noted StatCan.
CANADA REPORTS GROWTH IN BUSINESS INVESTMENT, REBOUND IN EXPORT & IMPORT
Business investments rebounded for most industries in the latest quarter, though they stayed below the pre-pandemic levels. Industries related to engineering structures noted a decline of 4.8 per cent in terms in Q3 2020.
Canada recorded an increase of 14.5 per cent in export volumes in the third quarter of 2020. While that was an improvement after the drop of 18.9 per cent in Q2 2020, it was down 8.7 per cent compared with Q4 2019.
Import volumes jumped 20.9 per cent, a growth that was driven by motor vehicles and parts, communication, audio and video equipment, etc.
CANADA’S ECONOMIC OUTLOOK
Canada’s GDP implicit price index, which represents the prices of all goods and services domestically produced, grew 2.6 per cent in the third quarter this year. The nominal GDP also rose by 11.6 per cent, which was higher than that of the real GDP in the Q3 2020.
While most of the numbers in the latest quarter remain below the pre-pandemic levels in Q4 2019, they still reflect an improvement from the COVID-induced lows of the previous quarters this year.
