Home Buying #Industry News #Real Estate
Home Buying #Industry News #Real Estate
Canada GDP Numbers: What Borrowers Should Know

Table of contents
Much like the global economic landscape, Canada’s economy is constantly in flux. The Gross Domestic Product (GDP) serves as a reliable indicator, providing insights and data into the economic health and prospects of the Canadian economy.
The most recent figures reveal that GDP decreased by 0.2% in November 2024, the largest monthly contraction since December 2023. The quarterly report released on November 29th revealed that GDP grew 0.3% in the third quarter of 2024. This post provides a greater understanding of Statistics Canada’s latest numbers and their implications for borrowers in the Canadian market.
Key Takeaways
- The latest GDP numbers show the Canadian economy decreased 0.2% in November 2024.
- In 2023, GDP grew 1.2%.
- Preliminary estimates indicate the economy will increase by 0.2% in December 2024.
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Latest GDP Numbers in Canada
Gross domestic product (GDP) measures Canada’s economic activity based on the total value of all goods and services the country produces over a specific time period. Dividing the total GDP by the population shows how much economic activity each citizen contributes on average, referred to as the GDP per capita.
When tracked over many years, GDP can show whether Canada’s economy is growing or contracting. When GDP is on the rise, this is a sign of good economic health, while a contracting GDP is a sign that Canada is not working at full capacity or might be heading toward or is already in an economic recession.
Statistics Canada reported that the Canadian economy declined 0.2% in November after increasing 0.3% in October.
Sectors that saw contractions include:
- Mining, quarrying, oil and gas extraction contracted 1.6%.
- The utilities sector contracted 3.6%, driven by a decline in electric power generation, transmission, and distribution.
- Transportation and warehousing declined 1.3%, the largest monthly decline since December 2022.
Sectors that saw gains include:
- Real estate and rental and leasing increased by 0.3% for the seventh monthly increase in a row.
- The construction sector increased by 0.7%, driven by higher residential and non-residential building construction.
- The accommodations and food services sector increased by 1.4%, the largest increase since January 2023.
Statistics Canada’s Q3 GDP data show an increase of 0.3% over the third quarter. This data means Canada still does not fit the technical recession criteria, as we would need to see two consecutive quarters of declining growth to fit the definition.
Higher government expenditures, business investment in engineering structures and machinery and equipment, and household spending on services in the second quarter were offset by declines in exports, residential construction, and household spending on goods.
Canada’s Economy Contracted 0.2% in November, With 0.2% Growth Projected for December 2024
November’s GDP declined 0.2%, with 13 of 20 sectors decreasing this month. According to Statistics Canada’s preliminary estimate for December, GDP growth is expected to increase by 0.2%. This advanced estimate is due to increases in retail trade and manufacturing and construction partially offset by declines in transportation and warehousing, real estate and rental and leasing and wholesale trade.
Based on the advanced estimates for December, the economy is expected to expand by 0.4% in Q4 of 2024 and 1.4% in 2024.
Housing Investment Increases
Housing investment, a key driver of the Canadian economy, increased 0.8% in the third quarter, the first expansion since the third quarter of 2023. Increases in higher ownership transfer costs (+4.9%) representing resale activity were offset by spending on renovations (-0.4%) and new construction (-0.1%).
Real Estate Rental and Leasing vs. Home Sales
The real estate rental and leasing sector increased by 0.3% in November, with offices of real estate agents and brokers and activities related to real estate (+3.4%) being the most significant contributor to growth this month. A rise in home sales across Ontario, Quebec, and British Columbia boosted the industry in November.
Household Spending Increases
Household spending rose 0.9% in Q3, primarily due to increased spending on new trucks, vans, and sport utility vehicles. Higher spending on financial services also contributed to growth. Spending on accommodation and food services fell, offsetting growth. Per capita expenditures increased by 0.2% in Q3 after falling in 6 of the last 8 quarters.
The Impact of Rising Bond Yields on Mortgage Rates
With the Canadian economy in a state of uncertainty, bond yields have seen a significant rise, hitting the 4% mark at the end of August 2023, which was a 16-year high. This rise in bond yields has had a knock-on effect on mortgage rates. Borrowers are faced with higher interest rates, leading to an increased cost of borrowing.
5-year bond yields have recently started to come down. They began falling in November 2023, and lenders began lowering rates for fixed-rate mortgages as the yield fell. The 5-year bond yield currently sits around 2.79%.
Frequently Asked Questions
What is GDP?
Gross Domestic Product (GDP) measures Canada’s total economic output over a specific period. It represents the monetary value of all finished goods and services produced domestically by Canadian businesses.
What is the GDP of Canada, and why is it important?
As of Q3 of 2024, Canada’s GDP increased by 0.3%, indicating economic growth. GDP is an important indicator of whether our economy is doing well or if there are signs of a recession. A recession can be determined by two consecutive quarters of decline in real GDP.
What are the major industries in Canada?
Canada has a diverse economy with key industries including natural resources (such as oil, mining, and forestry), manufacturing, services sector (including real estate, education, and health), and increasingly, technology and innovation.
Final Thoughts
The latest GDP numbers paint a complex picture of the Canadian economy. Future rate markets and economists are pricing in a 50/50 chance of a rate cut for the March announcement.
With the economy reacting daily to interest rates, this may be the opportune time to get your finances ready if you are looking to purchase a home or renew/refinance your mortgage. Contact our nesto mortgage experts to understand your borrowing capacity and solidify your mortgage strategy.
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