Canada's gross domestic product shrank unexpectedly in November, dragged down one-tenth of a percentage point largely on lower output in the energy sector.
In its latest GDP report released Tuesday, Statistics Canada notes that crude oil and natural gas extraction and exports led the decline as they dropped 2.5 per cent.
Analyzing the numbers, BNN's Michael Kane told 麻豆影视 Channel they point to a slowing economy.
"It was mostly in the oil and gas sector," he said, noting some strength in the mining and manufacturing sectors.
"We watch manufacturing very closely and manufacturing has been strengthening despite the fact that the Canadian dollar has been strong and goods we export look more expensive to outsiders," he said.
Manufacturing was up 0.6 per cent, as were retail sales as they posted their fourth-consecutive monthly increase.
But drops in wholesale trade, construction, utilities, finance and insurance as well as construction contributed to the overall real GDP dipping 0.1 per cent.
Analysts had expected GDP to grow by 0.2 per cent in November, after showing no increase the month before. Before then, the GDP had posted monthly increases from June to September.
Highlights from the latest GDP report include:
- Copper, nickel, lead and zinc mines bucked the extraction trend, posting a 0.3 per cent increase in November
- Production of durable goods helped bump manufacturing output up, on increased demand for machinery and transportation equipment, fabricated metal products and furniture
- While wholesale trade was down, retail sales were driven up 0.6 per cent by increased activity at motor vehicle and parts dealers as well as clothing stores
- Construction was down 0.3 per cent, but home resale activity was up 2.2 per cent
- Lower stock exchange trading volumes propelled the finance and insurance sectors down 0.4 per cent
- Unseasonably warm weather across much of the country is credited with the 0.6 per cent decline in the utilities sector
Responding to the latest figures, David Madani of Capital Economics says the economy still appears to be growing.
"Even allowing for a rebound in energy output at some point, we still expect moderate economic growth this year. Construction output should continue to ease due to past overbuilding and slower U.S. economic growth is expected to dampen growth in manufacturing output," Madani wrote in an email to CTVNews.ca
Madani is now predicting the fourth-quarter GDP will grow by 1.5 per cent or less compared with last year.
That's down from his previous estimate of 2 per cent annualized growth.
