Canada saw gross domestic product (GDP) growth of 0.7% in 2014’s third-quarter, setting the scene for an increase of 2.4% for the year, which would beat analysts’ forecasts of a 2.1% rise.
September alone saw growth of 0.4% after falling 0.1% in August. September’s increase was driven in large part by a 2.5% jump in mining, quarrying and oil and gas extraction, which had fallen 1.8% in August. Higher oil production drove a 3.6% increase in oil and gas extraction alone. Wholesale trade expanded 1.7% in the month.
The teachers’ strike in British Columbia contributed to a 1.0% drop in educational services in September. This drove a 0.3% drop in the public sector Canada-wide for the month.
BMO chief economist Douglas Porter pointed out that in addition to this latest data, the past three weeks have seen solid job numbers and a favourable unemployment rate, home sales and price gains and a stronger-than-predicted consumer price index.
He warns that it is too early to get too excited by this news.
“Even with this nice run, we suspect the Bank of Canada will be completely unmoved because of one word – oil,” Porter said.
“This bounty of good news is almost precisely countered by the coming hit to incomes, government revenues, consumer prices and growth from sagging crude prices, which is a net negative for Canada overall.”
He did, however, point out that Canada is one of the few economies in the world that is seeing performance that was better than planned for the year.
@EmmaHampelBIV
