Canada's GDP rebounded to pre-pandemic level in November 2021
Real GDP grew by 0.6 per cent last November, bringing it 0.2 per cent above its February 2020 level
Canada's economy grew by 0.6 per cent in November of last year, making it the sixth consecutive month of economic expansion prior to the rapid spread of the Omicron variant of the coronavirus, according to GDP numbers released by Statistics Canada Tuesday.
The economy rebounded to pre-pandemic levels, with real GDP 0.2 per cent above its February 2020 level.
While real GDP slowed slightly from October's 0.8 per cent growth, most sectors experienced economic expansion.
Growth in manufacturing and wholesale had the largest contribution to the rise in GDP in November.
Growth beat consensus expectations of 0.4 per cent, according to TD Economics senior economist James Orlando.
"This was a very solid report as there was a broad increase in output across most industries," said Orlando.
Restaurant owner says business was 'booming'
Orlando warned, however, that some of the gains made in November were likely slowed in December and January, as the rapid spread of the highly transmissible Omicron variant impacted economic activity.
That was definitely Mark Kitching's experience. The owner of Waldo's on King bistro and wine bar in London, Ont., says his business had been on an upward trajectory since July, which had made him feel that tough times were behind him.
"Before Omicron hit, [business] was booming," he said.
Kitching says he was able to hire three more workers, bringing his total team to 16.
Then Omicron hit.
"It just dropped off completely," the restaurant owner said.
Kitching started receiving calls to cancel Christmas parties once it was announced that capacity limits were being reinstated, and when January hit, he had to lay off workers.
Although the industry will likely recover again, says Kitching, the constant back-and-forth between lockdowns and reopenings has left restaurant owners dazed.
"I'm sure that it is going to get better, just right now, I don't feel anything," he said.
Economy expected to get back on track
Orlando says he expects GDP to rebound in the coming months.
"Given that we are likely past the worst of the Omicron wave, we expect a strong boost to monthly GDP in February and March," he said.
Desjardins economist Royce Mendes says the strong growth in November means that fourth-quarter GDP likely surpassed the Bank of Canada's 5.8 per cent forecast.
The confirmation of strong economic growth prior to the spread of Omicron means the Bank of Canada will likely be able to stick to its commitment of raising the interest rate in the near future to combat inflation.
"As a result, the Canadian central bank remains on track to lift its policy rate in March," said Royce.