MNI DATA ANALYSIS: Canada Flat October GDP Underwhelms>

By Yali N'Diaye

     OTTAWA (MNI) - Canada's economic activity was flat in October, 

following a 0.2% expansion in September due to weakness in 

goods-producing industries, data from Statistics Canada showed Friday. 

     A 0.4% contraction in  the goods sector offset a 0.2% increase in 

services, where activity has been expanding for 19 consecutive months. 

     Analysts in a MNI survey has expected October GDP to increase 0.1%. 

While the flat performance was underwhelming, the 12-month growth rate 

edged up to 3.4% from 3.3%. 

     Overall weakness was concentrated in 9 of 20 industrial sectors. 

     -- ENERGY CONTRACTING 

     Much of the weakness in the goods industries was related to energy, 

with mining, quarrying, and oil and gas extraction contracting 1.1%, 

erasing September's 1.2% gain. Oil and gas extraction was down 0.7% and 

mining and quarrying down 0.8%. 

     Overall energy production fell 0.9% on the month, trimming GDP by 

0.1 percentage point. Indeed, GDP excluding energy was up 0.1% in 

October, maintaining the same pace as in September. 

     While mining, quarrying, and oil and gas extraction was responsible 

for much of the weakness in goods-producing sectors, other major 

categories also contracted, except for manufacturing. 

     Utilities fell 1.3%, the largest decline since November 2016, 

offsetting the 1.2% increase recorded the previous month on the back of 

"volatile unseasonal weather conditions." Construction edged down 0.1%, 

led by the non-residential sector (-0.3%). 

     Manufacturing was the only major category to expand in the goods 

sector, as it was up 0.1%. A 0.3% gain in non-durable manufacturing was 

partly offset by a 0.1% decrease in durable manufacturing. 

     --SERVICES GROWTH ACCELERATES 

     Services, on the other hand, have been expanding continuously since 

April 2016, with growth accelerating to 0.2% in October from 0.1% in 

September. 

     The expansion was led by wholesale trade (+1.4%) and retail trade, 

which was up 1.1%, its largest increase since January 2017. 

     Weakness in the public sector partly offset the services 

performance. Public administration production contracted 0.1%. 

Educational services were flat after rising 0.5% in September. "The 

community colleges and CEGEPs subsector declined 4.6% as a result of a 

strike by Ontario community college faculty staff that started on 

October 16," the agency said. 

     In other components of the public sector, health care and social 

assistance edged up 0.2%. Overall public sector GDP was flat on the 

month, its weakness showing since January 2017. 

                     ** MNI - Ottawa **

[TOPICS: MACDS$,M$C$$$]