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Canada's economy grew in October and November: Statistics Canada

·2 min read
A construction vehicle is seen at the site of a landslide on Highway 7 near Hope, after rainstorms caused flooding and landslides across British Columbia, Canada November 18, 2021.  REUTERS/Jesse Winter
A construction vehicle is seen at the site of a landslide on Highway 7 near Hope, after rainstorms caused flooding and landslides across British Columbia, Canada November 18, 2021. REUTERS/Jesse Winter

Canada's economy grew for the fifth consecutive month in October, but it's too early to gauge the full effects of the rapid spread of the Omicron variant.

Statistics Canada says real GDP rose 0.8 per cent in October which matched estimates, following 0.2 per cent growth in September.

The manufacturing sector bounced back for a 1.8 per cent gain, after contracting 1.5 per cent in September. Motor vehicle output bounced back, with a 47.8 per cent gain, largely offsetting September's decline.

Canada’s hot housing market was also a key contributor to growth.

Construction rebounded 1.5 per cent after four declines in the previous five months. Residential construction led the way with a 2 per cent increase, driven by home improvement and multi-unit homes, which offset a decline in single-family home construction.

The real estate and rental and leasing sector grew 0.8 per cent, the largest increase since December 2020. Real estate agents' and broker output jumped 8.8 per cent as home sales hit record highs.

Legal services, which get a good portion of their business from real estate deals, was up 1.6 per cent.

Also See: The latest real estate news for housing prices, mortgage rates, markets, luxury properties and more at Yahoo Finance Canada.

An early estimate points to an overall 0.3 per cent increase for Canada's economy in November.

“Statistics Canada noted that accommodation & food services, and arts & entertainment were two areas leading growth in November, both of which will have been impacted by the recent Omicron surge and retightening of restrictions,” said senior economist Andrew Grantham.

“For Q4 as a whole, even after accounting for a potential, modest pullback in December, GDP is still running modestly ahead of the Bank of Canada's 4% forecast contained within the October MPR albeit probably not by enough to change the timing for the output gap closing and the first interest rate hike.”

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

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