2 December 2019

This fall, the exports were quite bad, restrained by the trade wars and the weakest global economic growth since the Great Recession. Shipments abroad were down compared to the second quarter. In addition to it, services, which have been a source of necessary strength for several years, rose by only 0.1%, following a 2.8% gain in Q2.

It’s important as total exports account for 32% of Canada’s $2.1 trillion GDP. The domestic market isn’t strong and large enough to provide the high rate of economic growth, but when executives face a wave of international orders, they have to invest and meet the demand. Nevertheless, the trade wars are pushing such investment down all over the world by creating uncertainty.

Canada’s real estate market has rebounded after a weak start of the year, when stricter lending rules pushed speculators out of the market and made less creditworthy borrowers choose between buying a smaller property or postponing the purchase to save more for a downpayment.

The demand also recovered, especially after the rate cuts in the U.S. started spreading through global credit markets. The investment into residential housing rose by 13.3% annually in the previous quarter, following a 5.5% of Q2.

Poloz will definitely welcome more signs proving the Bank has brought Canada’s real estate market to a soft landing. At the same time, it could also be another reason to continue the pause in order to avoid another credit fever, which led to record high debt levels.