• Home ::
• Fundamental ::
• Economic Indicators ::
• Canada: Canadian GDP edged down 0.1% in August

• Send
• Print
• Add To
• Rss

Canada: Canadian GDP edged down 0.1% in August

Fri, Oct 30 2009, 15:21 GMT
by Economic and Strategy Team

National Bank of Canada

Latest: -0.1% (actual)  +0.1% (expected)
Previous: 0.0%


FACTS: Real GDP at basic prices edged down 0.1% in August, after being unchanged in July (top chart). Oil & gas extraction (-2.3%) and primary metal manufacturing (-7.3%) were the main sources of the decline in August. Industrial production declined 0.8%. In goods-producing sectors, agriculture, forestry, fishing & hunting (-2.2%) and mining (-1.4%) also retreated. In services, wholesale trade (-0.5%), information & cultural industries (-0.3%) and administrative & waste management services (-0.3%) suffered the largest losses. This was mitigated by a rebound in public utilities (+1.8%), accommodation & food services (+0.8%), retail trade (+0.3%) and public administration (+0.6%). In the latter case, the increase reflected the end of a strike by municipal employees in Toronto.


OPINION: This morning’s report is disappointing. Temporary factors again affected production in August. aintenance work at some crude oil facilities on the East Coast slowed production, while temporary closures lead to a 9.1% drop in output for copper, nickel, lead and zinc mines. It should be noted that output of services was up for a fifth consecutive month (middle chart) and that the drop in manufacturing output was not generalized, as 13 industries out of 21 posted increases. What’s more, labour disputes were mostly behind the reduction in production of the primary metal industry. So far, real GDP in Q3 is down an annualized 0.6% from Q2. But the large increase in fulltime employment in September, and consequently in hours worked, suggests a large real GDP rebound in September (bottom chart). Also, we have noticed that real GDP at basic prices has underestimated real GDP at market prices (from which quarterly economic growth is calculated) in previous quarters. Even though Canada will not enjoy a rebound in economic activity in Q3 as large as the annualized 3.5% posted in the U.S., 2% growth is still plausible.

• Download full report with charts

Published on  Fri, Oct 30 2009, 15:24 GMT