Canadian GDP Increases 0.3% For September, Energy Sector Advances

Canadian GDP increased 0.3% in September, the fourth consecutive monthly advance. The gain was above expectations of a 0.1% monthly gain and the annual increase strengthened to 1.9%.

Goods-producing industries registered a gain of 1.1% for the month although the overall annual increase was held at 1.4%.

There was a further 2.7% increase in oil and gas extraction to give annual growth of 3.6% and the energy sector recorded 6.5% annual growth.

Construction output increased 0.7% on the month with a 0.5% manufacturing gain to give a 1.4% annual increase as durables and non-durables output increased.

Growth in the services sector was held to 0.1% on the month with a 2.0% annual gain with weakness in wholesale sales the biggest drag on overall GDP.

Public-sector growth amounted to 0.3% for the month with a 2.4% annual increase.

For the third quarter, goods producing industries report growth of 2.3%, reversing the 2.3% contraction seen for the second quarter, while the services sector expanded 0.5% from 0.4% previously. Overall GDP growth amounted to 0.9% following a revised 0.3% contraction previously.

The price deflator increased 0.6% for the quarter from a revised 0.3% previously, which suggests little in the way of inflationary pressure.

The data confirms that the oil sector regained ground during the third quarter with the economy overall recording moderate growth and there is likely to be a modest upgrading of growth forecasts. The data increase the potential for the Bank of Canada to wait for longer before taking any decision on whether to boost monetary policy further.

The Canadian dollar gained fresh support following the data with USD/CAD dipping back towards 1.3360 from 1.3390 and close to daily lows as the strong gains in oil prices continued to provide net support for the Canadian currency.

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Tim Clayton

Tim is a contributing author to EconomicCalendar.com. He is an economist and has been involved in financial markets for over 20 years as an analyst. He specialises in global economic trends, macro policy and central banks. Extensive knowledge, experience and data mining is used to anticipate trends in equities, bonds and forex with a contrarian slant. He is a graduate of the University of York with a degree in Economics/Econometrics.

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