Canada shows a 0.7% economic growth in September

August and September showed probably the last strong monthly economic growth, as Canada is heading towards a slowdown.

According to Statistics Canada, gross domestic product was up by 1.2% in August, while a preliminary estimate for September is 0.7%. It’s the fifth consecutive month of historically high results amid the economic recovery from a significant decline caused by the COVID-19 lockdowns.

Such a performance suggests a 10% growth in the third quarter. In this case, the annual gain would be 46% – a possible record level.

“The numbers are quite solid,” – noted David Doyle, an economist at Macquarie Capital Markets.

However, now the pace is slowing down. Recently, the central bank predicted an annual growth of only 1% in Q4 and pointed to an expected recovery slowdown during the next several quarters.

The report says economic activity in September was about 96.1% of the output levels we’ve seen in February.

Meanwhile, according to a Bloomberg poll, economists predicted 0.9% growth in August.

Spending was up from July to September due to warmer weather, lower virus counts and re-openings. Moreover, a strong demand for real estate caused an activity hike in the sectors of housing and construction.

Derek Holt, an economist at Bank of Nova Scotia, says September results remain a good starting point for the fourth quarter. In his opinion, Canada will show an annual economic growth of 3.5% over the last three months of 2020.