MNI DATA IMPACT: Canada Nov. GDP +0.1%, Beating All Forecasts>

By Greg Quinn and Anahita Alinejad

     OTTAWA (MNI) - Canada's economy defied all expectations in 

November as output grew for the first time in three months, which may 

ease the central bank's concern about a prolonged slowdown. 

     Gross domestic product grew 0.1% on the month following a similar 

contraction in October, Statistics Canada reported Friday from Ottawa.  

The MNI Median was for no change in November, with a minority of 

estimates calling for a contraction. 

     Output climbed even as transportation, wholesalers and automobiles 

were hit by strikes at CN Rail and UAW, and oil shipments curtailed by 

the ruptured Keystone pipeline. 

     The report follows BOC Governor's comments last week that 

the door is open to the first rate cut since 2015 on signs that 

global trade weakness is draining domestic spending. Today's report 

likely still leaves the economy on track for growth of less than 1% at 

an annualized pace. 

     Energy output rose 0.5% in November, and cold weather boosted 

utilities by 2.1%, Statistics Canada said. Construction also climbed by 

0.5%, the best gain since July, on gains in residential and commercial 

projects.

     "Increases in 15 of 20 industrial sectors more than offset notable 

declines in the mining, quarrying and oil and gas extraction and 

transportation and warehousing sectors, influenced partly by disruptions 

in rail transportation service and crude oil pipeline transportation," 

StatsCan's report said.

     The CN Rail strike cut rail transportation by 3.8%, while 

transportation fell for the fifth time in six months with a 0.9% 

decline. Potash mining dropped 18% as weak global demand led to 

shutdowns.

     While the one-offs suggest growth may stabilize following November, 

most economists and the BOC say growth will be weak again in the first 

quarter. The economy grew 1.5% in November from a year earlier, a pace 

that may not be fast enough to keep the output gap from widening further 

and putting pressure on the BOC's inflation target.      

     One bad piece of news was StatsCan revised down September to show 

GDP stalled, rather than its earlier estimate of a 0.1% increase.

--MNI Ottawa Bureau; +1-613-314-9647; greg.quinn@marketnews.com

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