As concerns of a recession continue to loom, Canada's gross domestic product (GDP) saw a small 0.1% bump in November, Statistics Canada (StatCan) reported on Tuesday.

This marks the second month in a row of 0.1% growth, and was led by gains in the services-producing sector, up 0.2%. With border restrictions dropping in the fall, air transportation grew another 4.6% in November -- the third consecutive month of gains -- and accommodation services saw a 2.5% gain. The finance and insurance sector, after three months of declines, finally posted a 0.5% increase.

This growth, however, was dulled by a contraction in the construction industry, which dropped 0.7% in November as a result of declines across declines across almost all subsectors, StatCan said. "The only exception was engineering and other construction activities (+0.5%), which posted its 24th consecutive monthly gain."

Residential building construction experienced the biggest decline, shrinking 1.8%. The report notes that this is the seventh drop for the sub-sector in eight months and is the largest since May 2022, when unionized construction workers were on strike, which led to countless delays.

Construction activity was down across all housing types, but single-detached homes and home alterations/improvements led the way. "These two types of residential construction activity have been large contributors to the decline in residential building construction in 2022," StatCan said.

StatCan's findings are in line with recent data on Canadian housing starts, released by the Canada Mortgage and Housing Corporation earlier this month, which revealed that housing starts slipped more than 5% in December, following a 0.2% drop in November.

Repair construction was also down a noticeable 1% in November, something StatCan attributes to contractions in both residential and non-residential repairs.

Of note, non-residential building construction shrank for the first time in five months, declining 0.4%.

"Declines in alterations and improvement and new construction of public buildings more than offset gains in new construction of industrial and commercial buildings," StatCan said.

Looking into December, for which there is not yet official data released, StatCan says GDP appears to be essentially unchanged, with increases in the retail, utilities, and public sectors being offset by decreases in wholesale, finance and insurance, and mining, quarrying, oil, and gas sectors.

StatCan goes on to say that "advance information indicates a 0.4% increase in real industry GDP in the fourth quarter of 2022 and a 3.8% increase for the year."

Real Estate News