Statistics Canada says the economy registered 2.7% growth in the exports of goods, led by increases in motor vehicles and parts as well as consumer goods and crude-oil bitumen. The Bank of Canada forecast a 2.5% gain, on the belief the economy would pick up momentum due to strength in non-commodity exports. It was also slightly below the Bank of Canada’s forecast of 2.5 percent growth for the quarter.
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The economy fell into the technical definition of a recession after recoiling for two straight quarters as it decreased by a revised annual pace of 0.7 per cent over the first three months of 2015 and again by 0.3 per cent in the second quarter.
The data agency added output in September fell 0.5% on a month-over-month basis, or the biggest since March, 2009, on weakness in the resource sector.
In the third quarter, the GDP grew at an annualized pace of 2.3 percent, in line with expectations.
December futures on the S&P TSX index were up 0.57 percent at 8:35 a.m. ET (1335 GMT).
The quarter also ended on a weak note as economic activity in September fell by a worse-than-expected 0.5 percent, driven by the decline in the oil and gas industry after a temporary production disruption. The Bank of Canada cut its policy rate twice this year to offset the negative fallout from the commodity-price rout.
“The third quarter came in like a lion but went out like a lamb, as strong numbers early on gave way to a drop in September”, said Avery Shenfeld, chief economist at CIBC World Markets.
Statistics Canada today reduced its estimates of the contractions in the first half, saying GDP shrank 0.7 percent in the first quarter and 0.3 percent in the first quarter. “By comparison, real GDP in the United States rose 2.1 per cent”, said the federal agency.
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The weaker economic conditions have put pressure on the new Liberal government’s election promises, which include big-ticket spending for projects like infrastructure that it says will produce jobs and growth.
