Canada November GDP -0.2% vs -0.1% expected

• The advance November estimate was -0.1%
• October reading was +0.3%
• December advanced reading +0.2% m/m
• There were broad based declines as 13 of 20 sectors contracted in November
• Goods-producing industries contracted 0.6% in November (vs +0.6% prior)
• Services-producing industries edged down 0.1% in November
• The transportation and warehousing sector declined 1.3% in November

The November number is the largest contraction since December 2023. Some of this decline is due to a weak month for oil extraction, likely due to turnarounds. The bounce in December captures that but none of it points to a particularly strong economy at the turn of the year.

What worries me is that construction is carrying a big portion of growth right now and much of that was in the pipeline from the low-rate period. Going forward, I would expect that to turn into a drag as the Toronto condo market goes bust.

This article was written by Adam Button at www.forexlive.com.