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Free AccessMNI: Canada 4Q GDP +1.7%, Weaker Than Expected; +3.0% In 2017>
By Courtney Tower
OTTAWA (MNI) - Canadian fourth quarter annualized GDP growth of
1.7% marked an increase from revised 1.5% growth in the third quarter
last year but was below market expectations of 2.0% growth for the
quarter, data released Friday by Statistics Canada showed.
The agency also reported that GDP rose 0.1% in December after a
0.4% gain in November, matching analysts' expectations.
GDP by industry data showed services edged up 0.1% in December
while goods-producing sectors were down 0.1%, owing largely to a 0.7%
drop in manufacturing. GDP excluding manufacturing rose 0.2%.
--BELOW BOC EXPECTATION
The 1.7% and 1.5% growth rates in the fourth and third quarters
fell sharply below the 4.4% and 4.0% growths in the second and first
quarters of the year.
Similarly, the quarterly increase of 0.4% in the fourth quarter,
the same in the third, followed 1.1% and 1.0% growths in the second and
first quarters of the year.
The annualized growth fell below the Bank of Canada's expectation
of +2.5% for the fourth quarter.
Real GDP rose 3.0% for all of 2017, the highest rate since 3.1% in
2011. "Much of this growth was attributable to the first two quarters of
2017, with deceleration observed toward the end of the year," Statistics
Canada said.
On a quarterly basis, there were positive indicators for the
comfort of the Bank of Canada, with business investment increasing 2.3%
from the third quarter as manufacturers, retailers and wholesalers added
to their inventories.
--EXPORTS, INVESTMENT, RISE
Export volumes were up 0.7% on the quarter following a 2.7% decline
in the third quarter. Real imports were up 1.5%, following a 0.1%
increase in the third quarter.
"Improved terms of trade boosted economy-wide purchasing power, and
real gross national income increased 1.0%," Statistics Canada said
Business gross fixed capital formation grew 2.3% in the fourth
quarter compared with +0.8% in the third. Higher investment in housing
was the main contributor, rising by 3.2% following a flat third quarter.
New housing construction rose 3.0%. Spending on non-residential
structures rose 1.3%
Business investment in machinery and equipment rose 3.0% in the
third quarter. This was primarily for aircraft and other transportation
equipment.
On an annual basis, exports rose +1.0% for the second straight
year, on a 0.6% gain for goods and +2.8% for services.
Employee compensation rose 3.9% in nominal terms, contributing to a
4.8% gain in household disposable income. The household saving rate
edged up to 3.6%.
--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com
[TOPICS: MACDS$,M$C$$$]
To read the full story
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.