Economy crawled forward 0.6 per cent in the last three months of the year -

Economy crawled forward 0.6 per cent in the last three months of the year

2012 growth was 1.8 per cent, down from 2.6 per cent last year


To recap:

  • As expected, the economy grew a meagre 0.2 per cent in the last three months of the year, roughly on par with the previous quarter, Statistics Canada said today. Annualized growth between October and December was 0.6 per cent.
  • In the last six months of 2012 the economy grew at the slowest pace since the financial crisis.
  • For the year as a whole, the economy grew 1.8 per cent, down from 2.6 per cent in 2011 and below the Bank of Canada’s forecast of 1.9 per cent.
  • Consumer spending was once again the main contributor to growth in the fourth quarter, advancing 0.7 per cent.
  • Business investment, governments spending and a small uptick in net trade were also bright spots. The main drag on growth, on the other hand, came from a sharp drop in inventories.
  • GDP shrunk 0.2 per cent in December, reflecting weakness in manufacturing and retail sales, despite the holiday season.

What the analysts say:

  • After closing 2012 on a flat note, the economy should see a small bounce-back in the first three months of the year on the back of stronger U.S. demand for Canadian exports, writes TD Economics’s Jonathan Bendiner: “nothing jaw dropping, expect a sub +1.5% gain in Q1.” Growth should pick up speed in the latter half of the year, he adds, once a resolution of fiscal troubles in Washington will lift the uncertainty that’s currently weighing on U.S. consumers and businesses.
  • Sustained household expenditures, which drove the highest growth in aggregate demand in over a year, was a surprise to to economists, who had expected Canadians to have reined in spending after a recent report showed disappointing retail sales in December, notes CIBC’s Emanuella Enenajor.

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Economy crawled forward 0.6 per cent in the last three months of the year

  1. Wait a minnit, whoa…..what happened to the ‘envy of the G7’? People flocking to Canada to see how we do it, the insistence on our ‘austerity’ being adopted elsewhere, that’s now thrown Greece and Italy into chaos, our cutback on immigrants, the Economic Action Plan ads everywhere because Harper is solely concentrating on the economy and jobs……?

    Our mail-room-economist seems to have…..’miscalculated’.

    • have you even read the forecast we are only 0.1 % off target

      • LOL lowering the target from Harper’s grand promises solve nothing.

      • The BoC originally forecast 2.4% GDP growth in 2012. It revised it down to 2.1% in July 2012.

    • I agree. Harper is responsible for nothing. For one his “Economic Action Plan” (aka stimulus package) was forced on him by the opposition. The funding for it ran out in 2010. But Harper keeps wasting $60M/yr of taxpayer money promoting it in any case.

      Second, Canada came through the recession relatively well (#7 OECD High Income countries) because we didn’t suffer a financial market meltdown. But this was due to Liberal banking regulations Harper was opposed to in opposition:

      “Much of the country’s resilience stems from policies—such as bank regulation and sound
      public finances—which predate Mr Harper.” (The Economist 2010)

      • The Opposition didn’t force any stimulus plan on Harper….that was decided on at the G-20 of 2008. They certainly supported it though.

        Yes, our policies…predating Harper…..saved us from the immediate meltdown

        • The Harper Government almost fell in the fall of 2008 because of an economic update that included austerity measures instead of a stimulus package. The Liberals and NDP formed a coalition to replace him. Harper abused prorogation to save his skin. A few months later Ignatieff became Liberal leader and backed off the coalition threat once Harper added a stimulus package in the spring 2009 budget.

          • The coalition had nothing to do with the stimulus. Harper agreed to that at the G20.

          • When did Harper agree to stimulus? Before committing to spending cuts in his fall 2008 update? Or after the coalition threatened to topple his government?

            “On November 27, 2008, Finance Minister Jim Flaherty provided the House of Commons with a fiscal update, within which were plans to cut government spending…. Flaherty’s update was ultimately rejected, purportedly on the grounds that it lacked any fiscal stimulus during the ongoing economic crisis,”

            BTW, 2008 was the year of the global financial market meltdowns which required trillions in bailouts and stimulus spending to avoid another Great Depression. (A crisis we have yet to recover from 5 years later and counting…)

            Wiki: 2008–2009 Canadian parliamentary dispute

          • Sigh….yes 2008 was the year of bailouts and stimulus spending….the G20 agreed to it in Nov. It was run by Bush in DC…..and Mr Harper was there and in agreement.

            Understanding the G-20 Economic Stimulus Plans | Brookings …

   20, 2009 – The G-20 countries, in particular, pledged in November 2008 to … Almost all countries in the G-20 have agreed to some type of fiscal stimulus …

            2009 G-20 London Summit – Wikipedia, the free encyclopedia

   Summit on Financial Markets and the World Economy … the World Economy, which was held in Washington, D.C. on 14–15 November 2008. … The leaders agreed that markets, financial institutions and the wide range of financial … and recapitalising the banking system, and to implement rapidly the stimulus plans.


            We are all Keynesians now

            The phrase gained new life in the midst of the global financial crisis of 2008, when economists called for massive investment in infrastructure and job creation as a means of economic stimulation


          • “and recapitalising the banking system, and to implement rapidly the stimulus plans.”

            That’s taken from the April 2009 London G-20 summit. Here’s the (unbroken) link:

            2009 G-20 London Summit

            Here’s something from the Nov 15, 2008 G-20 Washington Summit statement:

            “Use fiscal measures to stimulate domestic demand to rapid effect, as appropriate, while maintaining a policy framework conducive to fiscal sustainability.”

            Declaration Summit on Financial Markets and the World Economy

            It’s unclear what position Harper himself took. And the fact is he rejected stimulus spending in his Nov 27, 2008 update a couple of weeks later.

            According to the CBC, stimulus at this time was unclear:

            “Up for debate Saturday was whether participating countries should promise to enact government spending plans to stimulate their economies, an approach favoured by some European nations. While G20 leaders expressed support for the idea in theory, they avoided a commitment to take such actions at the same time.”

            Harper used the occasion to boast of Canadian banking regulation (he had nothing to do with):

            “‘Canada’s message is that good [financial] regulation begins at home, and that message was heard,’ [Harper] told reporters at the Canadian Embassy in Washington.”

            G20 leaders promise action on economic crisis

          • Yes, we all know what happened….well most of us do, anyway.

            I have posted articles on it many times over the years…it being 2013 now.

            Stimulus of about 600B was agreed to in Nov 08 under Bush….and a further trillion dollar one in 09. All you have to do is Google….the titles are all there.

            So are dozens of other reports on the stimulus.

            I’m tired of the ‘broken link’ excuse.

            I personally don’t care what Harp did or didn’t do….or any weaseling efforts he might have tried back then…..and neither does anyone else. The OO gets credit for what it does….not for things it doesn’t do.

            You worship Keynes….I don’t care about him either. It’s old economics….which is why it hasn’t worked in all this time.

            Repeating the same stuff over and over again doesn’t impress anyone.

            It’s 2013 now

        • Harper mouthed support of it at the G-20.. then came back and tried to pass a budget that didn’t have any.
          Only after the threat of facing a coalition government did he put those measures in, no matter what he may have claimed at the G20

          In short, at the G20, he lied as to his intentions, but the opposition forced him to stick to his word.

          • I agree Harper is a weasel who thinks he can have everything his own way….but the coalition formed because they thought he had gone too far.

  2. “below the Bank of Canada’s forecast of 1.9 per cent.”

    When did the BoC forecast 1.9%??

    Carney’s original forecast for 2012 was 2.4%, which he downgraded to 2.1% in July 2012.

    “[Mr. Carney cut] his economic growth projections for 2012 and 2013 to 2.1 per cent and 2.3 per cent, respectively, from his April prediction of 2.4 per cent in each year.”

    Interestingly enough, Kevin Page was closest with his original forecast of 1.9%, for which Conservatives criticized him for being too pessimistic. (Page took budget cuts into effect.)

    Carney warns falling oil price could grease economy’s slide

    Budget watchdog accused of being too pessimistic