09:22 AM EST, 12/23/2024 (MT Newswires) -- Canadian monthly real gross domestic product advanced 0.3% month over month in October, one tick higher than consensus expectations, noted Desjardins.

The strength was primarily driven by oil and natural gas extraction as activity at several facilities resumed following maintenance in August and September. That resulted in near-record production at some sites over the month, said the bank.

In addition, the real estate sector was the second-largest positive contributor to growth over the month. GDP growth would have been even stronger were it not for several port labor strikes which weighed on activity in the transportation and warehousing sector, pointed out Desjadins.

Revisions to the prior month also suggest that the Canadian economy was on a more solid footing entering Q4.

Statistics Canada's flash estimate for November also released on Monday showed that real GDP likely contracted by 0.1% month over month. That decline appears to be primarily driven by oil and gas, transportation and warehousing, and finance and insurance.

The Canada Post and port strikes continued through to November, so some of the weakness in transportation and warehousing may still be attributed to those labor disputes.

With the updated figures, the bank's GDP tracking for Q4 is still broadly in line with the 2% estimate from the Bank of Canada's October Monetary Policy Report. That said, the BoC will still need to lower interest rates further ahead of the mortgage renewal wall next year.

That, coupled with slowing population growth and uncertainty from United States trade policies, should see Canada's central bank cut rates by another 25 basis points in January, according to Desjardins.