Canada’s GDP Growth Is Slowing Down, Dragged Lower By Retail

The Canadian economy made an unexpected dip in the latest report. Statistics Canada (Stat Can) data shows gross domestic product (GDP) fell in October. The GDP decline is Canada’s first in 8 months, and follows tapering growth.

Canada’s GDP Made The First Decline In 8 Months

Canada’s GDP moved a little lower last month. Seasonally adjusted, GDP fell 0.1% in October – the first decline in 8 months. Stat Can reported the 3-month rolling average was up 0.2%, cutting September’s 0.4% number in half. This isn’t terrible news, but it’s a dramatic shift from the growth story told in the first half of last year. Of particular concern is the decline of activity in consumer related industries, such as retail.

Canadian GDP Growth

The monthly percent change in Canada’s seasonally adjusted GDP.

Source: Statistics Canada, Better Dwelling.

Retail Trade Takes The Biggest Hit In Years

The weakness of the consumer is probably the biggest thing to stand out. Retail trade dropped 1.1% in October, the largest decline since March 2016. That was around the energy market crash, so this is a significant event. Especially since there’s no particular area of industry experiencing an event.

Canadian GDP Growth – Retail Trade

The monthly percent change in retail trade, for Canada’s seasonally adjusted GDP.

Source: Statistics Canada, Better Dwelling.

Breaking down retail numbers, big ticket and housing related purchases are of concern. Stat Can noted motor vehicle and parts sales declined 2.0%, with the decline spread across all types of retailers. More important to you, building material, garden equipment and supply store, fell 2.1%. People aren’t buying new cars, and/or home renovation supplies.

Canada is ending the year very differently from how it started. GDP growth has tapered, and fallen into negative territory. This news follows the most recent job report, which shows a significant decline in employment.

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  • Lawrence J 10 months ago

    The GDP growth chart looks the same to me.

    • Ethan Wu 10 months ago

      The previous drops were mostly preceded by large increases. This one is a taper down to a negative pull. So this isn’t the numbers were pulled forward (aka borrowed growth being repaid), it’s negative growth after a taper – more indicative of an issue.

      Be interesting to see if new house sales are enough to pull this one out.

  • Mitch 10 months ago

    No time to spend, everyone needs to pay their mortgages. Same reason all of the family and independent restaurants are closing down in Toronto. Soon it’ll be one big Jack Astor’s.

    • GTA Landlord 10 months ago

      I believe there’s a condo going up at one of them, which is why they didn’t renew their lease.

    • Dave 10 months ago

      Service Corp announced last quarter that Jack Astor’s is having troubles too. Visits are down by around 5% due to increased costs, increased minimum wages for staff in Ontario, increased competition from food delivery companies.

    • SUMSKILLZ 10 months ago

      Everything is closing due to mental property taxes for retail buildings. It in turn jacks up rents. Add in min wage jumps, and everything falls to pieces.

  • Holton 10 months ago

    Hey who wants to 800k cheat crappy town houses? How about housing price increased 300% in the last 6 years while wages increased by maybe 5%?

    Justin Trudeau’s political legacy will be making housing unaffordable for young families and causing lots of social pain.

    • Brad 10 months ago

      If you think the housing bubble started with Justin Trudeau you are delusional… this has been building up for over a decade and gaining momentum annually.

  • Neo 10 months ago

    People will be shocked by the mass layoffs in retail and banking from January to March. People who haven’t been paying attention anyway.

  • Mike 10 months ago

    The stats are made up from fake and manipulated data. Before the elections everything was going well and suddenly things are looking as not so good. Canada has been in recession for a long time. They are fooling the average person on the street by publishing these figures of 0.1% every month just to claim we are not in recession. It is all an illusion!

Comments are closed.