Canada’s real gross domestic product (GDP) was flat in October after growing by 0.2% growth in September, according to data released today (December 22) by Statistics Canada.
StatsCan said service-producing industries grew by 0.2%, mainly from growth in wholesale trade, retail trade and real estate. The output from goods-producing industries fell by 0.4%, largely due to the mining and oil and gas sectors.
The wholesale trade sector, meanwhile grew for the ninth time in 11 months in October, with a 1.4% rise more than offsetting September’s decline of 0.9%. Six of nine subsectors expanded, led by wholesalers of machinery, equipment and supplies (+3.4%), personal and household goods (+3.2%) and petroleum products (+3.1%). The wholesaling of motor vehicles and parts declined 1.7% as automotive imports decreased, StatsCan said in a release.
The retail sector expanded 1.1% in October after three consecutive months of declines. Gains were posted in seven of 12 subsectors, led by a 2.3% increase at motor vehicle and parts. General merchandise stores gained 2.4%, more than offsetting three months of declines. Food and beverage stores were up 1% while building material and garden equipment and supplies continued to grow, rising 2%.
“Yesterday’s upside surprises on retail sales and inflation were countered by this morning’s monthly GDP numbers showing a slow start to Q4,” RBC Economics Research economist Josh Nye said in a release. “As was the case in the summer when the economy appeared to hit a soft patch, temporary shutdowns in one industry were responsible for some of October’s weakness.
Nonetheless, GDP growth has clearly shifted to a slower trend after 4% gains earlier this year.”
Real estate and rental and leasing rose 0.3% in October, StatsCan said. Activity at the offices of real estate agents and brokers (+2.1%) was up for the third month in a row, led by increased home resale activity in Ontario and British Columbia. However, the level of activity of this subsector remains below its March 2017 level, following provincial government changes to housing regulations in Ontario in April.
Mining, quarrying, and oil and gas extraction was down 1.1% in October, the fourth decline in five months.
Oil and gas extraction declined 0.7%. Non-conventional oil extraction was down 3.5% in October, the fourth decrease in five months, reflecting in part a loss of capacity during maintenance operations. Following a 5.1% gain in September, conventional oil and gas extraction was up 1.8%, led by increased crude petroleum extraction.
Mining excluding oil and gas extraction contracted 0.8% after six consecutive months of growth. Non-metallic mineral mining fell 1.9% as potash mining dropped 5.3%. Other non-metallic mineral mining excluding potash grew 3.6%.
Metal ore mining edged up 0.1% as growth in iron ore (+1.4%) and gold and silver ore (+1.8%) was partly offset by declines in copper, nickel, lead and zinc (-1.3%) and other metal ore mining (-1.8%). Coal mining declined 1.8%, the agency said.
Support activities for mining, oil and gas extraction declined 5.2%. This was a fourth consecutive decline after a string of increases that began in the spring of 2016 and ended in April 2017.
"Today’s release points to Q4 growth coming in closer to Q3’s 1.7% increase than the Bank of Canada’s 2.5% forecast," Nye said. "That would still be at or slightly above the economy’s longer run speed limit, so while the second half of 2017 won’t be nearly as impressive as the first half, trend-like growth should keep the economy running near full capacity.
"With inflation starting to respond to these tight conditions, we don’t think it will be long before the Bank of Canada acts on their tightening bias."
