October 31, 2019 / 12:56 PM / 22 days ago

Canada economy grows 0.1% in August, less than expected, on manufacturing rebound

OTTAWA (Reuters) - Canada’s economy gained 0.1% in August, a touch less than analysts expected, amid a rebound in manufacturing and an uptick in services-producing industries, Statistics Canada data showed on Thursday.

FILE PHOTO: Double-crested cormorants nest on a tree in front of the skyline as a plane flies by during sunset at Tommy Thompson Park, located on a man-made peninsula, known as the Leslie Street Spit, in Toronto May 26, 2015. REUTERS/Mark Blinch/File Photo

Analysts in a Reuters poll had predicted an increase of 0.2% in August following no change in July. Overall, 14 of the 20 industrial sectors monitored expanded on the month, while six declined, the national statistics agency said.

The Canadian dollar was little changed at about C$1.3160, or 75.99 U.S.cents, after the data.

The data comes after the Bank of Canada, which has sat on the sidelines on monetary policy since October 2018, held interest rates steady as expected on Wednesday, but revised its domestic and global growth forecasts lower in light of uncertainty around international trade conflicts.

“The sources of blame can shift from month to month, but the grade on Canada’s economy continues to be a ‘gentleman’s C,’ not failing but not worthy of a gold star either,” said CIBC Capital Market’s Avery Shenfeld in a note.

“While the Bank of Canada is anticipating a mediocre Q4 as well, there’s room to undershoot their call if monthly growth continues to oscillate between 0.0% and 0.1%,” he added.

Statistics Canada said goods-producing industries were up 0.2% in August following two months of declines, while services-producing sectors rose 0.1%.

Canada’s manufacturing sector grew by 0.5% in August, largely because of increased sales, after stagnating in July. Durable manufacturing, official data showed, rose 1.0%, while non-durable manufacturing declined by 0.2%.

Meanwhile, the professional, scientific and technical sector, which has seen the second-largest growth in employment since the start of this year, grew 0.7% in August. The category has not recorded a decline in growth since January 2018.

Wholesale trade slumped 1.3% in August, more than offsetting July’s growth, the national statistics agency said, with broad-based declines reported. Machinery, equipment and supplies wholesalers posted a third decline in four months, falling 2.7%, in part, because of lower imports.

Oil and gas extraction contracted 1.6% in August. Oil sands extraction fell 3.6%, the fourth straight month of declines, because of facility maintenance shutdowns.

In a separate release, Statscan said Canadian producer prices dropped by an unexpected 0.1% in September, almost entirely due to lower prices for meat, fish and dairy products, while raw materials prices were unchanged on the month after falling 1.8% in August.

Reporting by Kelsey Johnson, additional reporting by Fergal Smith in Toronto, Editing by Dale Smith and Bernadette Baum

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below