Even though swathes of the country were locked down due to COVID-10 restrictions, the economy managed to eke out better than expected economic growth.
Statistics Canada says real GDP grew 0.7 per cent in November, a seventh consecutive monthly increase, following the worst monthly declines on record in March and April.
An early flash estimate points to a 0.3 per cent increase for December, during a time when 63,000 jobs were lost.
“This is truly a pleasant surprise, as early reads on wholesale and retail trade, as well as employment, pointed to sizable declines last month amid further restrictions. Big gains in housing and mining more than compensated for those weak spots,” said BMO chief economist Doug Porter.
Strength in mining, quarrying, and oil and gas extraction sector led to a 3.9 per cent jump.
Statistics Canada estimates the economy grew 1.9 per cent for the fourth quarter, but is expected to have contracted 5.1 per cent in 2020.
More government help to prevent economic slowdown
There are signs that we could be in for a slowdown in the coming months.
“With unemployment rising in December and public health officials being forced to tighten restrictions even further in January, the situation likely became more dire in the new year,” said CIBC senior economist Royce Mendes
Adam Corbett, Canada & currency analyst at Cambridge Global Payments, also expects growth to slow as consumers spend no more than they need to.
“As consumers contribute approximately 56 per cent to the Canadian economy, in the absence of their spending, the burden shifts to governments and businesses to fill the void,” he said
“Business sentiment surveys suggest it rests on the government to shoulder the majority of this slack, with the economy as a whole sitting about 3 per cent lower than its pre-pandemic reading.”
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.