Canada’s gently improving economy

A number of recent numbers from Statistics Canada testify to gently improving economic conditions.

• In November, wholesale sales  rose 0.7% to $49.6 billion, continuing a gradual upward trend begun in early 2009, deep in the recession. Five of the seven subsectors made gains with the computer and communications equipment and supplies industry leading with a 6.3% increase. The motor vehicle and parts subsector, up 1.5%, recorded its second consecutive increase.

• Retail sales also edged upward in November to $39.4 billion, adding 0.2%, the fifth consecutive monthly gain. Higher sales at motor vehicle and parts dealers as well as electronics and appliance stores more than offset declines at most store types, says StatsCan.

• Manufacturing sales,  likewise, increased in November, up 1.7% to $49.9 billion. As with wholesale sales, manufacturing sales have pursued a gradual upward trajectory since early 2009. Sales rose in 12 of 21 industries, says StatsCan, with the transportation equipment industry — up 3.8% to $8.7 billion in the month — leading the charge and accounting for more than a third of the total increase. Within that industry group, motor vehicle industry sales increased 4.1% and aerospace product and parts industry gained 6.5%.

In the primary metal industry, sales rose 5.9% to $4 billion, the highest gain since July 2011.

• Also on a positive note, the number of people receiving regular Employment Insurance  (EI) benefits in November decreased by 4,500 or 0.8% to 528,000, says StatsCan. From a peak close to 850,000 in mid-2009, the number of EI recipients has consistently edged its way downward.

• Investment in non-residential building construction was $12.0 billion in the fourth quarter, a 1.0% gain from the previous quarter. This was the third consecutive quarterly increase and was led by higher spending for commercial and industrial buildings.

• Canadian existing home sales continued to weaken in December, plunging 17.4% year over year, reports the Canadian Real Estate Association. The silver lining in that dark cloud is a mere 1.6% slippage in housing prices year over year.

“The Canadian housing market continues to cool,” wrote Bank of Montreal senior economist Benjamin Reitzes in a recent report. “While some will focus on the deep dive in sales from a year ago, it looks as though prices are providing a better read on the health of the sector, as homeowners are in no rush to sell. Prices are easing gently, consistent with a soft landing through much of the country.”

TD Bank Group economist Francis Fong, likewise, ends his recent report on an upbeat note. Although he doesn’t see a lot of growth in the first half of this year, the second half is a different story. “By the second half of [the] year, we do anticipate an acceleration of economic growth,” he wrote, “particularly in the United States. With Canadian manufacturers and exporters still tightly linked to the fortunes of the U.S. economy, this should translate into a stronger pace of manufacturing sales growth.”