'Data For Business' is an effort of the Langley Chamber, in partnership with the Canadian Chamber, to bring our members reports, stats and analysis on economic and business data to help inform business and investment decisions.  Read our latest update below: 

The Canadian economy contracted by 1.1% at annual rates in the third quarter (-0.3% quarter-over-quarter) but is avoiding a technical recession as data for Q2 was adjusted upwards to show slight growth (a recession is often technically defined as two consecutive quarters of economic contraction).

Key Takeaways:

• This decline was driven by lower exports and slower inventory accumulation, although government spending and household spending on services increased.
• Exports fell by 1.3%, mainly due to a significant drop (25%) in refined petroleum energy products. Imports edged down by 0.2%, with declines in various sectors such as clothing, footwear, and electronics.
• Slower inventory accumulation in the third quarter, the smallest since 2021, had a downward impact on GDP growth. Manufacturers drew down inventories, notably in non-durable goods, while retail inventories increased.
• Housing investment increased by 2%, marking the first positive growth since early 2022. The rise was driven by a 6.5% increase in new construction, particularly of apartments.
• Household consumption remained unchanged, with durable goods increasing by 1.0% and services by 0.3%. Non-durable (-0.4%) and semi-durable (-2.8%) goods spending declined.
• Business investment in non-residential structures declined 2% in the third quarter.
• Compensation of employees rose 1.3%, driven by increased average earnings and employment, with notable growth in professional and personal services. Household savings also increased in the third quarter, with the saving rate reaching 5.1% as household disposable income growth (+1%, boosted by July’s federal grocery rebate) surpassed the rise in spending (+0.8%).

Commentary:

“The Canadian economy contracted by 1.1% at annual rates in the third quarter. Consumer spending is stagnating and businesses are adjusting their operations amid this slow growth environment. The upward revisions to the second quarter partially tapered today’s negative growth. With decent flash estimate for October, we’re now on pace to end 2023 on better footing than previously anticipated. All together, we’re not out of the woods yet. Higher interest rates, in addition to a challenging global economic environment and sluggish consumers, will make for a precarious 2024.”

• Andrew DiCapua, Senior Economist, Canadian Chamber of Commerce