Canada: GDP likely to decline by 0.1% in October – TDS

Canada’s industry-level GDP is forecast to decline by 0.1% MoM in October owing to a contraction in the goods-producing sector and a large drag from retail and wholesale trade, according to analysts at TD Securities.

Key Quotes

“Preliminary crude output edged lower which will offset the rebound on the East Coast after a series of oil spills weighed on offshore production through Q3. Elsewhere, the UAW strike will weigh on motor vehicle production and contribution to a pullback in manufacturing activity during the month.”

“Weaker utilities output will provide another headwind, owing to unseasonably warm weather during the month. Services should fare slightly better, although a sharp pullback in both retail and wholesale trade volumes will weigh. Professional services, a significant driver of recent strength in the services sector, saw a large (+2.1%) increase in hours worked for October which should provide a tailwind.”

“A 0.1% decline for industry-level GDP is hardly a desirable start to Q4 but should leave quarterly growth tracking near 1%, slightly below the latest BoC projections.”