Economic outlook | October 2019
Growth persists amid uncertainty
Despite ups and downs on the global front, Canadian growth was exceptionally strong in the second quarter of 2019. Overall, the country’s economic activity expanded by 3.7 percent—a welcome change from the two prior quarters of virtually no growth. But, with slower global growth and plenty of risks looming on the horizon, the key question is: will this pace of growth last?
This is one of the topics Deloitte Canada’s chief economist Craig Alexander explores in our fall 2019 quarterly economic outlook, entitled Growth persists amid uncertainty. Despite the slumping global manufacturing sector and overall escalation of geopolitical risks, particularly the US-China trade dispute and a disorderly Brexit, economic growth should persist, albeit at a modest pace both in Canada and around the world.
The possibility of a global downturn—one that would almost inevitably drag Canada into recession—looms large over the world economy, as demonstrated by the continued inversion of yield curves in advanced economies (see figure below). However, a scenario whereby trade frictions are successfully resolved, sentiment improves, and risk-asset prices—including stocks and commodities—rise in anticipation of higher growth is not out of the question.
The recent soft patch encountered by the Canadian economy has not been uniformly distributed across the provinces (see figure below). While the global slowdown was related to manufacturing, Canada’s industrial heartland fared comparatively well. Quebec is on track to top the leaderboard this year, while the slowdown in Ontario was more related to a cool-off in housing than weakness in manufacturing.
Real GDP growth by the Canadian economy distributed across the provinces
Our fall economic outlook report also breaks down pertinent economic trends in Canada, the United States, and around the world—and outlines steps Canadian businesses can take to succeed in this uncertain environment. Read Growth persists amid uncertainty today.
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Craig Alexander is the first Chief Economist at Deloitte Canada. He has over twenty years of experience in the private sector as a senior executive and leading economist in applied economics and forecasting. He performed macroeconomic research, regional and sector analysis, and fiscal market forecasting and modelling.
Craig is a passionate public speaker and holds a graduate degree in Economics from the University of Toronto.