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Struggling due to supply shortages Manufacturing sales volumes slumped 3.3% m/m in April, as the disruption from the global semiconductor shortage intensified. While sales volumes should gradually rise again from May, it will be some time before overall …
14th June 2021
Semiconductor shortage weighs heavily on trade The global semiconductor shortage weighed heavily on exports and imports of motor vehicles in April and this disruption continued in May. While exports elsewhere performed better, the broad-based weakness of …
8th June 2021
Continued restrictions weigh on employment The continued coronavirus restrictions caused employment to fall for the second month running in May but, with re-opening now underway across the country, employment should rise strongly in the coming months. The …
4th June 2021
After strong Q1, growth appears to have slowed sharply in Q2 The first-quarter data confirm that the economy took the second coronavirus wave in its stride but, with the preliminary estimate showing that GDP fell in April, the third wave has been much …
1st June 2021
Strong end to Q1 but sales hit hard by lockdowns in April After reaching a record high in March, the preliminary estimate suggests that the lockdowns caused retail sales to slump in April. There is likely to be only a small rise this month given stores …
21st May 2021
Inflationary pressures emerging The large 0.6% m/m seasonally-adjusted rise in prices in April shows that the jump in inflation to 3.4% was not due to base effects alone. With firms’ selling price expectations elevated, we expect inflation to remain close …
19th May 2021
Manufacturing sales volumes fell in the first quarter The 2.3% m/m rise in March was not enough to prevent manufacturing sales volumes from falling during the first quarter. The sector should perform better in the second quarter, but sales volumes are …
14th May 2021
Slump in hours worked implies GDP fell in April The third coronavirus wave caused the labour market recovery to go into reverse in April and, with no imminent sign of the restrictions being eased, there is little chance of a meaningful rebound this month. …
7th May 2021
Net trade made positive contribution to first-quarter GDP growth The much stronger rise in imports than exports in March partly reflects the unwinding of temporary factors that weighed on imports in February. Net trade contributed positively to …
4th May 2021
Q1 growth could be stronger than US, but third wave to weigh on Q2 At 0.4% m/m in February, GDP growth was a bit weaker than Stats Can first thought but, with the preliminary estimate pointing to a much larger 0.9% m/m rise in GDP in March, first-quarter …
30th April 2021
Retail sales to drop back again in April The gains in retail sales in February and March are likely to be reversed this month, but the high level of consumer confidence suggests spending will recover quickly once the coronavirus restrictions are lifted. …
28th April 2021
Base effects exaggerate inflationary pressure Despite a muted monthly rise in prices, inflation jumped to 2.2% in March due to base effects. It will surpass 3% in April for the same reason. While inflation should then ease, we expect it to remain above 2% …
21st April 2021
Tight supply and buoyant demand to drive acceleration in house price growth House price inflation according to the Teranet index surpassed 10% in March for the first time since 2017, and the high sales-to-new listing ratio implies it will continue to …
20th April 2021
Semiconductor shortage weighs on manufacturing sales The 1.6% m/m fall in manufacturing sales in February was primarily due to the negative effect on the auto sector of the global semiconductor shortage. While that shortage has persisted into March and …
15th April 2021
Several indicators strengthen to record-highs The Bank of Canada’s quarterly surveys suggest that investment and consumption will recover strongly in the coming year, and are another reason to expect the Bank to trim its asset purchases next week. While …
12th April 2021
Strong gain to be partly reversed this month The 303,000 jump in employment in March was far stronger than expected. While some of the gains will be reversed this month due to the tightening of coronavirus restrictions, that will prove temporary and the …
9th April 2021
Semiconductor shortage weighs on trade The global semiconductor shortage and severe winter weather in the US contributed to the falls in exports and imports in February, with the auto sector hit especially hard. Those shortages look set to persist for …
7th April 2021
Stronger performance points to QE reduction in April The economy’s stronger-than-expected performance at the start of 2021 bodes well for the recovery and is likely to further convince the Bank of Canada that it is time to reduce the pace of its asset …
31st March 2021
Preliminary estimate points to strong February The fall in retail sales in January was smaller than first indicated and the preliminary estimate for February suggests that, as lockdowns were lifted, most of the decline over the prior two months was …
19th March 2021
Inflation to surpass 3% in April The modest rise in inflation to 1.1% in February is set to be followed by much sharper increases to more than 2% this month and to more than 3% in April, as energy inflation surges. The increase to 1.1%, from 1.0% in …
17th March 2021
Manufacturing sales surpass pre-pandemic level The manufacturing sector made a strong start to 2021, despite the major disruption to the auto industry from the global microchip shortage, as sales across the natural resource sectors rose sharply. The 3.1% …
15th March 2021
Easing of restrictions boosts employment The strong rebound in employment in February almost fully made up for the losses in December and January. While the pace of gains is now likely to slow, employment should continue to rise as the vaccination program …
12th March 2021
Temporary factors behind rare trade surplus The 8.1% m/m surge in exports in January was partly due to temporary factors but, amid strong global demand for commodities, exports are doing better than we expected a few months ago. The sharp improvement in …
5th March 2021
Economy continues to outperform expectations The 9.6% annualised gain in fourth-quarter GDP was three times as strong as the consensus forecast from just a couple of months ago. The preliminary estimate that GDP grew by 0.5% m/m in January confirms that …
2nd March 2021
Retail sales should start rising again this month Lower-than-usual holiday spending caused retail sales to fall by more than 3% m/m in December and, amid the latest lockdowns, the preliminary estimate shows sales fell by almost as much again in January. …
19th February 2021
Tightness of supply points to further house price gains The further slowdown in the monthly pace of gains in January suggests house price inflation will soon peak at a little more than 10%. The 0.3% m/m rise in the Teranet House Price Index equated to a …
18th February 2021
Inflation to rise to 3% by April Inflation rebounded to 1.0% in January and is set to rise to 3% or higher in April. That spike will mainly reflect base effects linked to the sharp falls in energy prices early last year but, as the economy re-opens, we …
17th February 2021
Hours worked rise despite slump in employment While the slump in employment in January suggests GDP growth will slow sharply this quarter, the unexpected rise in hours worked supports our view that GDP will at least continue to increase, and the strength …
5th February 2021
Economy shrugs off latest coronavirus wave A strong rise in GDP in November and an unexpected gain in December suggest that the economy carried far more momentum into the new year than expected. Nevertheless, as a result of the latest lockdowns, growth …
29th January 2021
Restrictions on services help boost retail sales The tightening of the coronavirus restrictions in November helped boost retail sales, as consumers substituted spending on goods for spending on services. That means the retail sales data paint too positive …
22nd January 2021
Unexpected decline not a sign of things to come The unexpected fall in CPI inflation to 0.7% in December is not a sign of things to come. Instead, base effects linked to the steep falls in prices in the spring last year will push up inflation to 3% by …
20th January 2021
Renewed supply-chain disruptions to weigh on activity Manufacturing sales dropped back again in November and renewed supply-chain disruptions suggest that the sector will continue to struggle in the coming months. The 0.6% m/m fall was worse than the …
19th January 2021
Stronger investment and hiring intentions bode well for 2021 The fourth-quarter Business Outlook Survey (BOS) showed that firms’ hiring and investment intentions are now back to pre-pandemic norms, which bodes well for the economic recovery this year. …
11th January 2021
Employment to fall again in January The drop in employment in December would have been even larger were it not for the early timing of the survey reference week. With further restrictions imposed across the country since December’s survey was carried out, …
8th January 2021
Further rise in exports won’t be enough to prevent fall in first-quarter GDP Exports rose in November and the recent improvement in the business surveys bodes well for growth in the coming months, but the lockdowns suggest that GDP will still edge down in …
7th January 2021
Recovery to go into reverse in December and January The economy continued to recover at a decent pace in October and November despite the various restrictions imposed on high-risk services, but the broader lockdowns coming into effect in Ontario and …
23rd December 2020
Sales holding up for now Retail sales rose by 0.4% m/m in October, although the sharp falls in gasoline and clothing sales imply that the worsening coronavirus outbreak was beginning to bite. Even if retail sales continue to hold up relatively well, …
18th December 2020
House prices to keep rising throughout 2021 House price inflation rose to 9% in November and is likely to surpass 10% in the first quarter. We expect house price inflation to slow sharply after that, but prices should keep rising throughout 2021. It was …
17th December 2020
Inflation spike a statistical quirk The higher-than-expected rate of inflation in November was mainly a statistical quirk resulting from continued difficulties in collecting price data for travel tours. The same effect could cause inflation to rise by a …
16th December 2020
Manufacturing sales recovering only slowly Manufacturing sales only edged up in October and the disruption from the coronavirus at home and abroad is likely to hold back growth in the next few months, but we are more positive about prospects beyond then. …
15th December 2020
Employment to fall in December Employment outperformed expectations last month, but the additional coronavirus restrictions imposed since the November LFS survey was carried out lead us to think it will fall back in December. The 62,000 rise was more than …
4th December 2020
Growth to slow sharply GDP expanded by a record 40.5% annualised in the third quarter, as the first lockdowns were lifted, but that still left it 5.3% below its pre-pandemic level. Some more lost ground appears to have been made up in the fourth quarter, …
1st December 2020
Sales rose by more than expected The 1.1% m/m rise in retail sales in September was much better than expected, but sales appear to have stagnated in October and the prospect of restrictions being imposed on all non-essential businesses in some cities does …
20th November 2020
Inflation unlikely to rise further in short term, but long-term risks increasing The unexpected rise in inflation to 0.7% in October, from 0.5%, was mainly due to higher food prices. While renewed restrictions related to COVID-19 could cause prices for …
18th November 2020
Manufacturing sales remain depressed The 1.5% m/m rise in manufacturing sales in September reversed the 1.4% fall in August, but still left sales down 6% y/y. While the business surveys point to another month-on-month rise in October, the increase in …
16th November 2020
Employment recovery hindered by new restrictions Employment growth slowed sharply in October, but the 84,000 gain was still impressive given that the renewed coronavirus-related restrictions caused employment to fall in some sectors. Moreover, the easing …
6th November 2020
Net trade a drag on third-quarter GDP Exports and imports both rose at a similar pace in September and we expect them to continue to edge up over the rest of the year, despite the recent reimposition of domestic restrictions and in key export markets like …
4th November 2020
Third-quarter growth to be 47% annualised The 1.2% m/m rise in GDP in August and the preliminary estimate of a 0.7% gain in September confirm that the initial recovery has been stronger than first anticipated. The latest restrictions will contribute to a …
30th October 2020
Inflation set to remain low The September data showed that the housing boom is now feeding through into higher inflation, but the headline rate is nevertheless set to remain below 1% for the rest of this year. The rise in inflation to 0.5%, from 0.1%, was …
21st October 2020
Decline in sales likely to be temporary The 2.0% m/m decline in manufacturing sales in August was caused by a drop back in motor vehicle sales to more normal levels. The strong rise in rail freight volumes in September bodes well for sales last month. The …
16th October 2020