Canada’s economy appears to be turning a corner—away from a technical recession and toward a sustainable growth path.
The pace may not be consistent, at the moment, but the numbers are starting to add up to a third-quarter gain after two consecutive declines in the first half of 2015, NewsNow reported.
In fact, gross domestic product—the measure of all goods and services produced in this country—could be close to, or even matching, that of the United States between July and September.
So far, most forecasters expect the current quarter’s output to come in anywhere from 1.5%—in line with the Bank of Canada’s most recent estimate—to about 2.8%.
Quite a turnaround from declines of 0.8% in Q1 and 0.5% in Q2, which met the broad definition of a recession. The next key economic numbers will come Wednesday, with the release of GDP figures for July.
“Recent economic data on external trade, manufacturing sales, wholesale and retail sales and oil rig drilling activity have been mixed,” said David Madani, the Canadian economist at Capital Economics.
“Taking all these into account, we estimate that the economy grew by 0.1% (in July),” he said. “If this is correct, it would point to third-quarter annualized GDP growth of somewhere between 1.5% and 2%.”
Other forecasters—including those at Bank of Montreal and Canadian Imperial Bank of Commerce—expect the July GDP number to be closer to 0.2%, leading to an even bigger Q3 recovery.
“We’re looking for a mediocre 0.2% (July) gain, held back by disappointments in wholesaling and non-auto retailing,” said Avery Shenfeld, CIBC’s chief economist.
“But that builds on a healthy June gain, and still leaves the quarter pointing to a 2.7% annualized growth rate.”
BMO is calling for slightly larger growth of 2.8% between July and September—which also matches its Q3 forecast for the United States, the world’s largest economy and Canada’s No. 1 trading partner.
“And there’s a very good chance that Canada actually may have grown a little bit faster than the US in the third quarter,” said Douglas Porter, BMO’s chief economist.
