The strength of the Canadian economy has taken everyone by surprise this year. Fuelled by a pace of 4.5 per cent growth in the second quarter, the economy is on track to post a stellar performance of greater than 3 per cent in 2017, putting it on track to outperform most developed countries.
The economy added more than 200,000 jobs in the first 8 months of the year and employment is on pace to grow by 1.5 per cent this year, the strongest annual growth since 2007. The improved employment landscape has boosted consumer optimism, supporting consumption in the first half of the year.
Consumer spending has been the driver of this performance, as it has grown at an annual pace of over 4.5 per cent. Business investment is posting its first increase in three years.
However, the recent pace of expansion is unsustainable and economic growth will slow in 2018, reflecting slower consumer spending and a decline in residential investment. The uncertainty around the future of the NAFTA in some ways exemplifies the weakness in the trade sector this year and next.
Get The Conference Board of Canada’s latest global, national and provincial economic outlooks from Craig Alexander, Senior Vice-President and Chief Economist. This presentation provides economic analysts and organizational decision-makers alike with a concise, engaging and interactive review of the near-term economic outlook.