MNI 5 THINGS: Canada 3Q Ann. GDP +2.0%; Biz Investment Falls>

--5 Things We Learned From Canadian GDP Data

By Courtney Tower

     OTTAWA (MNI) - The following are the key points from the third 

quarter Canadian GDP data and the September data on GDP by industry, 

released Friday by Statistics Canada: 

     - Canadian real GDP growth at an annualized rate slowed to 2.0% in 

the third quarter from +2.9% in the second quarter, as expected by 

analysts in an MNI survey. Quarter-over-quarter, real GDP grew 0.5% in 

the third quarter, following a 0.7% increase in the second. Final 

domestic demand was flat and business investment in machinery and 

equipment fell 2.5%, the sharpest drop since the third quarter of 2016. 

Business inventory accumulation slowed and manufacturers' inventory 

increased. Overall, the 2.0% growth was above the Bank of Canada's 

estimate of 1.8% for the third quarter. 

     - For the month of September, GDP by industry was down 0.1% from 

August, the first monthly decline since January this year, while 

analysts in a MNI survey had expected a 0.1% gain. A 0.7% decline for 

all goods-producing industries was the reason for the overall decline. 

Services, however, edged up 0.2%. Declines in wholesale trade (-0.7%) 

and in finance and insurance (-0.4%) were offset by growth in most other 

service sectors. Ten of 20 industrial sectors declined in September. 

Energy fell 1.4%, the largest drop since October 2017. GDP excluding 

enery was flat on the month. 

     - Overall, 10 of 20 industrial sectors declined in September, 

handing a weak start to the fourth quarter. There were declines for 

mining, quarrying, and oil and gas (-1.2%). Manufacturing declined 0.5%, 

the second consecutive monthly decline. Non-durable manufacturing was 

down -1.2%, while durable manufacturing was unchanged. The construction 

sector continued to decline and spending on new housing slowed. 

Wholesale trade was down (-0.7%) while retail trade grew (+0.4%). 

     - On a quarterly basis, growth in household spending slowed from 

0.6% in the second quarter to 0.3% in the third, the smallest gain since 

the first quarter 2015. Household final consumption contribution to 

annualized GDP was down to 0.7 percentage points from 1.3 points the 

previous quarter. 

     - Business investment disappointed, with spending in 

non-residential structures, machinery and equipment down 1.8%, the 

largest decline since the fourth quarter of 2016. Overall business 

investment actually trimmed the annualized GDP by 1.3 percentage points 

after adding 0.1 point the previous quarter. Elsewhere, exports rose 

0.2%, with a contribution of 0.3 points after 3.9 points in the second 

quarter. Imports fell 2.0%. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

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