Geopolitical pressures are aggravating the situation
Variegated weaknesses in exports and investments pulled Canada’s economic growth down to a near halt.
The phenomenon was particularly apparent in the housing market, which suffered slower investment in new construction during the fourth quarter of last year, according to a new Bloomberg analysis.
This was despite the continuous strength exhibited by the multi-family asset class.
Canadian gross domestic product grew at an annualized pace of a mere 0.3% in the three months ending December. This level was virtually unchanged on a quarterly basis, but was also within expectations set by economists and the Bank of Canada.
Taking the year as a whole, the annual growth rate of Canadian real GDP was 1.6% for 2019. This was lower than both the 2018 reading (2%) and the U.S level (2.3%).
Geopolitical tensions had an especially strong impact upon business. Exports shrank by 5.1% annualized, while business investment fell by 3%.
Household spending was up 2% annualized, driven by much improved labour market conditions. However, “Canadians are largely buying non-durable goods and services -- which suggests they may be wary of big ticket items. Another indicator of caution is that the household savings rate rose to 3% in the fourth quarter.”
