Decline over the past 3 months was the most significant in nearly a decade
In its latest data release, Statistics Canada reported that the real estate market continues to suffer from slowdown, with construction declining by 0.4% month-over-month in August.
Overall, residential projects fell by 1.6%. The decline observed over the past three months was the largest since the start of 2009, Bloomberg reported.
Still, higher stock and bond trading along with Alberta’s resurgent oil industry propped up the national economy, which grew for the 7th straight month in August.
StatsCan stated that Canadian GDP exceeded expert predictions of an unchanged level by increasing 0.1% in that month.
Read more: CMHC releases housing starts data for Toronto, Vancouver
Toronto-Dominion Bank senior economist Brian DePratto said that these trends are keeping the economy on track for approximately 2% annualized growth, which could give the Bank of Canada the go-signal to raise interest rates again in January.
“Combine a healthy economic outlook with the tilt towards hawkishness that accompanied last week’s rate hike, and you have the recipe for further monetary tightening.”
The BoC has hinted that further hikes are needed “to bring monetary policy to neutral,” adding that the economy is at or near full capacity. Last month, the institution raised interest rates for a 5th time since July 2017.
