BCREA ECONOMICS NOW
GDP Growth - January 31, 2011
The Canadian economy expanded by 0.4 per cent in November, easily beating consensus expectations of 0.3 per cent. Growth in November was boosted by the mining, oil and gas sectors as well as a strong Christmas shopping season which boosted retail trade for the month. Record low mortgage rates help propel the finance and insurance sector nearly 1 per cent higher on increased mortgage lending volume and also pushed the output of real estate agents and brokers 7.6 per cent higher as home sales increased. Weakness in construction and the auto industry weighed most heavily on growth in November. Economic growth is trending toward 2.3 per cent for the fourth quarter of 2010, in line with the Bank of Canada's forecast and evidence that weakness in the third quarter was likely a temporary blip.
The outlook for next year is beginning to look a little brighter, however uncertainty in both the US and Global economy will still present a challenge to growth in 2011. We are currently forecasting that the Canadian economy will resume slow and steady growth of around 2.4 per cent in 2011 and that the aforementioned economic uncertainty will keep the Bank of Canada from acting on interest rates until July.
source: British Columbia Real Estate Association