Canada’s October Economy Grew 0.1% on Oil Production
Canada’s economy expanded for the first time in three months in October as increases in oil and gas production countered manufacturing declines.
Gross domestic product grew 0.1 percent to an annualized C$1.29 trillion ($1.30 trillion) after stalling in September and shrinking 0.1 percent in August, Statistics Canada said today in Ottawa. The increase matched the median forecast in a Bloomberg economist survey with 23 responses.
Without the 0.4 percent rebound in oil and gas extraction, the first increase since April, Canada’s economy would have stalled in October, leaving little optimism growth in the fourth quarter will be as strong as predicted by the Bank of Canada, said Ian Pollick at Royal Bank of Canada.
“By no means does this mean that the quarter is saved in terms of forecasts,” said Pollick, senior fixed-income strategist in Toronto at Royal Bank’s RBC Capital Markets unit. “As you start to get some more data during the quarter, you are going to see estimates get revised down. It’s going to be a large divergence from what the bank of Canada thinks growth will come in at this year.”
The Bank of Canada is relying on consumption and business investment to lead an expansion over the next two years, and forecast that growth will accelerate to a 2.5 percent annualized pace this quarter after slowing to 0.6 percent in the July- September period. Governor Mark Carney reiterated Dec. 4 he may raise interest rates even as central banks in Japan and the U.K. have been easing.
The Canadian dollar weakened 0.5 percent to 99.24 cents per U.S. dollar at 9:12 a.m. in Toronto, after depreciating to 99.29 cents, the weakest since Dec. 7. One dollar buys $1.0075.
Wholesale trade increased 0.8 percent in October, rebounding from a 1 percent drop the month before, with gains in farm products, food and tobacco, Statistics Canada said. Retailing increased 0.3 percent on motor vehicle and part sales, according to the report.
Cadillac Fairview Corp. said Oct. 23 it will spend C$350 million to expand the Sherway Gardens mall in Toronto starting in January.
Mining excluding oil and gas dropped 0.4 percent, as falling coal production outweighed increases in the extraction of metals such as copper, nickel and lead.
Manufacturing was the biggest drag on growth in October with a 0.4 percent decline, Statistics Canada said. Machinery making dropped and the temporary closure of an Alberta meat plant curbed food processing.
The National Hockey League’s lockout and the cancellation of games led to a 1.6 percent decline in arts, entertainment and recreation. The industry’s C$10.7 billion contribution makes up about 0.8 percent of the world’s 11th largest economy.
Gross domestic product grew 1.1 percent in October from a year earlier, Statistics Canada said.
To contact the reporter on this story: Greg Quinn in Ottawa at email@example.com