RBC Economics presents an in-depth analysis of the key drivers of economic activity in Canada and the United States, including global factors that affect near-term forecasts.
“The trade war took a larger than expected bite out of Canadian GDP in Q2, but data still shows an economy that has weathered recent trade pressures better than feared when uncertainty was most acute in the spring.”
—RBC Quarterly Macroeconomic Outlook
In our last quarterly update, Canada’s economic outlook was more positive than anticipated—and this remains true in Q3, with growth tracking closer to the least negative scenarios from earlier in the year:
- Early Q3 GDP indicators look better than Q2, with export volumes rising for a third consecutive month in July and manufacturing sales increasing.
- Most Canadian exports remain tariff-free under CUSMA exemptions.
- Federal and provincial governments have announced significant economic support packages.
- Growth in unemployed workers due to permanent layoffs slowed to 4.7% year-over-year in August.
But downside risks remain, including Canada’s dependency on a tightly integrated North American industrial sector and maintaining the CUSMA exemptions.