economy
SURPRISE! CANADIAN GDP’S Q2 HICCUP Despite the recent interruption in the re-expansion of economic activity, Canada is positioned to establish a solid year of GDP growth in 2021.
In some ways the path into and out of Covid, insofar as changes in Gross Domestic Product (GDP) are concerned, was and has been predictable: there was going to be an initial and dramatic stepback in economic activity as sectors of our economy shut down, and then this would be followed by a rapid re-animation of our economy as we began to re-open, followed by slower incremental gains as we made our way back to trend. This “square-root”-shaped path of growth has
characterized job growth across the country, as have quarterly changes in GDP. It was a bit of a shocker, then, to see that Q2 2021 GDP actually declined, by 0.3%. More than anything, this reflected a slowdown in housing markets from peak levels, as well as a reduction in exports. Because we expect these factors to play less of a role in shaping GDP growth in Q3, next quarter's reading should be much more positive, both literally and figuratively.
CANADIAN GDP UNEXPECTEDLY DIPS
15%
10%
9.1%
5%
2.2% 1.4%
1.1%
0.5%
0.1%
0.1%
0%
-0.3%
-2.0%
-5%
-10%
-11.3%
-15%
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
DATA: CHANGE IN GROSS DOMESTIC PRODUCT, EXPENDITURE-BASED, CANADA, QUARTERLY SOURCE: STATISTICS CANADA. TABLE 36-10-0104-01
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