MNI 5 THINGS:Fin Mkt Activity,Oil And Gas,Boost Aug Cdn GDP>

--5 Things We Learned From Canadian GDP Data

By Yali N'Diaye

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

data on Canadian GDP by industry released Friday by Statistics Canada: 

     - Canada GDP rose 0.1% in August, matching the consensus of 

economists in a MNI survey, resulting from divergent performances across 

sectors. July had increased 0.2%, and June 0.1% (revised up from a flat 

performance initially reported). Despite the monthly slowdown, GDP 

growth accelerated to 2.5% in August from 2.3% in July on a 12-month 

basis. Assuming a flat reading in September, GDP growth would increase 

0.4% in the third quarter, after a 0.8% gain in the second quarter. 

However, the Bank of Canada has already factored in a slowdown, that 

should be followed by a rebound in the fourth quarter. 

     - Financial market volatility provided a boost to the finance 

sector, which was up 1.5% after decreasing 0.2% in July. In particular, 

increased activity in bond and stock markets supported depository and 

credit intermediation services, as well as financial investment 

services, funds and other financial vehicles. So despite the 0.6% 

decrease in insurance and related activities, output in the finance and 

insurance sector overall rose 1.0%, the largest gain since May 2017. 

Excluding this industry, GDP would have been flat in August, after 

rising 0.2% in July. 

     - Oil and gas extraction was the other key positive contributor to 

August GDP expansion, with a 1.9% rise that more than erased July's 1.3% 

drop. Overall mining, quarrying, and oil and gas extraction rose 0.9% on 

the month. Excluding this category, GDP would have been flat. 

     - Overall, however, output contracted in 12 of 20 industries, 

representing 55% of GDP, showing the concentrated nature of the gains. 

Goods-producing industries were flat, with declines in construction 

consistent with a slowdown in new housing. Manufacturing was down 0.6%, 

the largest decrease since August 2017, led by a 0.9% drop in 

non-durables. 

     - Supported by finance activity, services edged up 0.1% despite 

declines in wholesale (-0.1%) and retail (-0.2%) trade. Real estate and 

rental and leasing was up 0.3%, as home resale activity increased. 

Output in the public sector rose 0.2%. 

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

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