Skip to main content

Canada’s 3rd quarter GDP numbers make for grim reading

As expected third quarter GDP growth in Canada was poor, annualized growth of 1.2% (against 5.8% in the first quarter), is nothing to write home about.  Moreover, in September itself GDP declined by 0.1%, which is far worse than expected and sets a difficult stage for the 4th quarter. 



Our initial estimate in December 2009 was for GDP growth of 3.2% for the year, based on solid natural resource prices (check), strong-ish Canadian dollar (check) and oil price in the $72-$75 range (check) what we underestimated was the impact of trade, exports were a massive drag in the 3rd quarter GDP numbers to the tune of 0.4% -- somehow we had anticipated that the U.S. economy would be doing better than it is.  The one single item of strength in the GDP figure is personal consumption which rose 0.9% (again in the quarter).  Housing was also a drag on the GDP number, not entirely surprising, since it was during all of 2009 and early 2010 such a massive contributor to Canada’s GDP growth.


The BoC target was 3% GDP growth for 2010, revised down from 3.7% in late 2009.  The reality is that although 3% for the year is achievable it is a difficult target, since it would imply a massive acceleration in the last quarter.  Since so much of Canada’s economy is dependent on exports a 2.1% GDP growth rate for the last quarter is a tall order (especially since September itself saw a negative print).

It seems that I was, after all, too bullish on the Canadian economy – and me who thought I was too bearish! 

(Source: StatsCan) 

Popular posts from this blog

what people get wrong about tariffs

 The issue is simple. What percentage of the economy is dependent on tariff goods? The truth, is that the US economy is far more closed than people understand. People genuinely believe that all manufacturing has ceased to exist in the United States all given to China on the altar of woke policy the truth can be further from That statement. Only about 15% of US GDP is related to foreign trade. Of that amount, slightly more than half is from Canada in Mexico. And half of that is energy. What that means, is that about 7% of US GDP is tariff dependent. The proof in the pudding, is how little money tariff generates. People think that 30 or 50 billion is a lot it’s not in an economy that has $3 trillion. The impact on the US economy will be less visible but not absent. Inflation hasn’t occurred yet first because tests have hardly started to bite, but more importantly it’s such a small percent of the economy. Now certain things are critical. The rare earth metals from China were critical....
Post a Comment
Read more

The end of Tesla?

 it takes a special kind of idiot, to think that he can antagonize his entire customer base, and think that it will not impact his business. When Elon Musk went to work for Donald Trump, and created the doge department, he antagonized every liberal, and these people represent 90% of his client base.That’s not a brilliant move. Now Elon Musk is worth hundreds of billions of dollar, so he shouldn’t care a great deal, however, he needs to care because of several other issues. The cyber truck has been a disaster, most have had to be recalled because of defective glue, it’s not a truck, it’s not a car, it’s noisy, relatively uncomfortable, but great as a development platform. What Tesla has learned in making car manufacturing more seamless is truly amazing. The problem was that Elon Musk was so pissed with the Democrats, and with Joe Biden, in particular because of some slight, which were just plain stupid too. By the way, that he decided to support with hundreds of millions of dollar, ...
Post a Comment
Read more

Trump and Venezuela...

The US now owns Venezuela…and not in a good way.  America is not known for its nation building skills, and yet it now owns the disaster that is Venezuela.   Starvation and exodus are the natural progression.   In addition it will become a haven for narco-terrorists, more so than it already was. I am sure that Trump and his friends really thought that little attack very well…I guess that he will now attack Iran now.  
Post a Comment
Read more