The Canadian economy isn’t back into recession territory but the lack of GDP growth in October has economists revising their projections for the fourth quarter.
"October GDP was flat as pancake, and that might be the story for Q4 as well," CIBC economist Nick Exarhos wrote in a note to investors.
Data released Wednesday (December) by Statistics Canada revealed the economy did not grow at all throughout October. A month prior, the economy contracted 0.5%.
While the mining, oil and gas sectors managed to post 0.7% growth, those gains were offset by declines in other areas of the economy.
Retail shrank 0.4%, finance and insurance shrank 0.1% and the construction sector shrank 0.1%.
The Bank of Canada spent much of the year enacting policies aimed at boosting exports and revving up the country’s manufacturing sector. But in October, manufacturing declined 0.3%.
“This soft GDP report pretty much sums up 2015: The economy quite simply struggled to grow at all this year, and any gains were of the most meagre variety and were well below expectations,” BMO chief economist Douglas Porter wrote in a note to investors.
He said the new numbers pushed him to revise BMO’s Q4 growth rate from 1.5% to a “micro” 0.5% annualized rate.
TD economist Dina Ignjatovic also admitted the new data means "growth (in Q4) is likely to come in below our current tracking for 0.9%."
