Canada GDP nowcasts point to Q2 growth as payroll measure improves

Canadian activity indicators compiled from Statistics Canada data show output and labour-market measures improving from an October 2025 baseline, while two private nowcasts point to second-quarter GDP growth. Scotiabank estimates Canadian GDP expanded at a 2.3% quarter-on-quarter seasonally adjusted annual rate in the second quarter, and the Canadian Chamber of Commerce’s Business Data Lab puts its nowcast at 5.04%.

The figures highlight a firmer near-term reading for Canada’s economy, although the estimates differ materially. Econbrowser, using StatCan data and its own calculations, compared quarterly real GDP with monthly GDP after indexing both series in logarithms to October 2025. A separate comparison placed monthly GDP alongside employment, nonfarm payroll employment and employment for the population aged 15 and over on the same October 2025 base.

The distinction between the GDP measures matters for investors and policymakers because they are built from different parts of the national accounts. Quarterly GDP is drawn from expenditure-side tabulations, which measure activity through spending categories such as consumption, investment, government outlays and net exports. Monthly GDP relies on production-side data, which track output by industry.

Those two approaches can send different short-term signals before revisions and benchmarking bring the accounts into closer alignment. Econbrowser noted that the quarterly and monthly Canadian GDP series diverge, reflecting those separate statistical foundations rather than a single identical measure of activity.

On the labour side, the same StatCan-based analysis showed employment indicators, including nonfarm payroll employment, against monthly GDP on a common scale. Econbrowser characterized nonfarm payroll employment as recovering. The presentation did not give point changes for the employment measures, but it placed the labour series in the context of broader monthly business-cycle indicators for Canada.

Nowcasts are model-based estimates produced before the full official GDP release. They typically combine incoming data, such as output, trade, labour and survey indicators, to estimate current-quarter growth. Scotiabank’s Q2 estimate of 2.3% annualized and the Business Data Lab’s 5.04% reading both imply expansion, but the Chamber’s estimate is considerably higher than the Bloomberg consensus cited by Econbrowser. No consensus figure was provided.

For markets, the gap between the two nowcasts underscores uncertainty around the pace of Canadian growth rather than disagreement over whether the economy expanded. The official assessment will depend on StatCan’s published national accounts and any subsequent revisions to monthly industry output and expenditure-side data.

This story draws on original reporting from Econbrowser.