Economy solid before crisis hit, data show
By Louise Egan
OTTAWA (Reuters) - Canadian factory sales fared better than expected in September, suggesting the third quarter may have brought a respite from the dismal economic growth rates of the first half of the year.
But evidence that financial market volatility is taking a toll on consumer confidence in the fourth quarter also emerged on Friday, with home sales plummeting to a six-year low in October.
Statistics Canada said on Friday that manufacturing sales inched up 0.1 percent in September, defying expectations for a 1.5 percent decline on top of the sharp 3.7 percent tumble they took in August.
Strong demand from the aerospace sector in the quarter offset continued weakness in the auto sector and primary metals, both of which were hurt by the slowing U.S. economy and falling commodity prices.
The Canadian economy now appears to have been on stronger footing than thought in the period, ahead of what many see as the start of a recession in the fourth quarter.
The September factory data follows stronger-than-expected numbers on housing in September and employment in October.
"It's correct to say the numbers of late haven't been as bad as feared," said Mark Chandler, fixed income strategist at RBC Capital Markets.
"The thing is, the numbers we're seeing are still from the third quarter and also still reflect some of the residual strength from commodity prices, in terms of supporting income in Canada," he said. Continued...