Yes, We Have No Recession (So Far)

March 28, 2024 - Statistics Canada today released the January GDP data, and it contained mostly good news, indicating that Canada may (possibly) be able to avoid a recession in its battle against inflation. Overall, GDP was up 0.6% compared to December. This is better than StatsCan's flash forecast for January (+.04%). Gains were broad-based, with 18 of 20 sectors increasing in January. Both the services- and goods-producing industries were up (0.7% and 0.2% respectively). The public sector was the biggest winner, posting a 1.9% gain, largely due to the end of a public sector workers' strike in Quebec. Manufacturing also saw 0.9% growth, due mainly to durable goods manufacturing; the increase to durable goods was largely due to growth in the transportation equipment manufacturing subsector.

Construction was one of two sectors to show a loss - 0.51% for the month. Residential construction declined by 1.51%. Non-residential construction also fell by 0.33% after posting gains in November (1.03%) and December (0.97%). 

StatsCan also released its flash estimate for February, anticipating a gain of 0.4%. This could point to an overall positive result in Q1 this year, moving us further away from a recession scenario and towards a soft landing as the Bank of Canada continues to fight inflation. 

Read StatsCan's announcement here.