Canadian real gross domestic product (GDP) rose 0.3 percent in the third quarter, following a 0.6 percent gain in the previous quarter, according to the latest release from Statistics Canada. Final domestic demand grew 0.9 percent, as business investment in plant and equipment advanced. On a monthly basis, real GDP by industry declined 0.1 percent in September.
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Expressed at an annualized rate, real GDP grew 1.0 percent in the third quarter, after expanding 2.3 percent in the second quarter. In comparison, real GDP in the United States grew 2.5 percent in the third quarter.
Business investment in plant and equipment recorded its strongest quarterly increase so far this year, as investment in machinery and equipment expanded 6.5 percent in the third quarter. An increase in consumer spending also contributed to the growth in final domestic demand.
Exports of goods and services declined 1.3 percent after four consecutive quarters of growth. The main contributors to the decline in goods exports were automotive products (-2.1 percent) and energy products (-8.5 percent), while commercial services (-1.7 percent) contributed the most to the decline in services exports.
Housing investment declined 1.3 percent in the third quarter, the first decline since the first quarter of 2009. Expenditure on ownership transfer costs related to housing resale activity was down 10 percent, on the heels of a 13 percent drop in the second quarter.
The increase in the goods-producing industries (+0.8 percent) significantly outpaced that of the services industries (+0.1 percent) for a fourth consecutive quarter.
Business inventories rose $18 billion in the third quarter, an accumulation similar to that recorded in the second quarter. Manufacturers’ inventories, especially inventories of durable goods, increased again in the third quarter. Wholesale trade inventories of both durable and non-durable goods, as well as the inventories of retail motor vehicle dealers, were up.
Manufacturing, mining and the public sector were the main sources of growth in the third quarter. The increase in manufacturing was concentrated in the production of durable goods, while the strength in mining was attributable largely to higher activity at copper, nickel, lead, and zinc mines. Construction and retail trade also contributed to the overall increase in GDP. Conversely, decreases were recorded in the output of real estate agents and brokers, as well as in wholesale trade and in the finance and insurance sector.
Manufacturing output declined 0.6 percent in September, with 10 of the 21 major groups contracting. Both durable goods (-0.8 percent) and non-durable goods (-0.4 percent) manufacturing were down. In particular, manufacturing of machinery, food products, transportation equipment, wood products and chemicals decreased. The output of primary metal products and printing increased.
The public sector (health, education and public administration combined) rose 0.2 percent in September. Retail trade increased by 0.5 percent, with higher activity recorded at general merchandise stores and at new car dealers. Retailers of building materials and garden equipment and supplies reported a decline, partly mirroring the weakness in residential construction in September.