Factories lead Canada’s fastest economic growth in 5 months

Bloomberg

Canadian gross domestic product grew at the fastest pace in five months on a lift from manufacturing, while oil made an unexpected contribution as prices began to fall for Alberta crude.
Output grew 0.3 percent in October, Statistics Canada said from Ottawa, faster than the median forecast in a Bloomberg economist survey of 0.2 percent.
Factory production expanded 0.7 percent to make up most of the losses over the prior two months, while wholesaling climbed as much as 1 percent.
The highest volume of trading since March 2016 on Canada’s benchmark stock exchange in Toronto also boo-sted finance and insurance industry by 0.9 percent.
The GDP report is the last one Bank of Canada policy makers will see before they set interest rates and update their quarterly forecasts on January 9. Governor Stephen Poloz has said how soon he adds to his five rate increases since mid-2017 will depend on fresh data, and that he needs to assess the drag from a drop in Alberta oil prices.
There wasn’t much direct evidence of an energy slump in the October GDP figures. Oil and gas extraction climbed 3.6 percent as producers returned sites to service after maintenance shutdowns. The provincial government in Alberta has ordered production cuts in January that could slow growth from here.
“The Canadian economy managed to churn out hearty growth overall in October,” Bank of Montreal Chief Economist Doug Porter said in a research note. The economy will expand at a 1.5 percent annualised pace in the fourth quarter and slow to 1 percent in the first three months of 2019, with output “particularly challenged” by Alberta’s oil curtailments, he said.
The economy’s main weak point in October was the fifth straight decline in construction, which fell 0.1 percent.