Canada’s economy grows for first time in three months as factories rebound

Canada’s gdp expanded the very first time in three months in November on a manufacturing and wholesaling rebound, a sign the economy is shaking off the damage from a drop in commodity prices.

U.S. economic growth brakes sharply, rising only 0.7% as strong dollar weighs on exports

Output expanded 0.3 percent for an annualized $1.65 trillion, Statistics Canada said Friday in Ottawa, matching the median forecast in a Bloomberg economist survey. Production had stalled in October and shrank 0.5 per cent in September.

Wholesaling rose by 1.3 percent, the biggest gain in a year, and retail sales increased 1.2 per cent. Factory production rose 0.4 per cent with the first grow in 3 months led by durable goods for example wood and electrical products.

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The expansion backs Bank of Canada Governor Stephen Poloz’s view that industries outside the energy sector will revive the economy’s momentum after output shrank within the first half of the entire year. The November expansion breaks a spell of negative developments, including the decline of Canada’s dollar to the lowest since 2003 and warnings about overstretched housing markets.

A renewed slump in prices for oil along with other commodities stalled the economy within the fourth quarter and will delay its return to full capacity ’till the end of the coming year, Poloz said Jan. 20. The Governor also said he decided against cutting interest rates to record lows on indications of momentum in other areas of the economy, in particular non-energy, exchange-rate sensitive exports, and also since the government pledged to offer a program of deficit spending in the next budget.



Today’s report even showed what’s promising for that energy industry. Gas and oil extraction grew 2.1 per cent in November. Non-conventional production rose 3.4 per cent, part of a recovery from September’s 10.6 percent drop triggered by production shutdowns.

Growth was held back as the construction industry’s output stalled, and also the finance and insurance industry shrank a fourth straight month.

Transportation and warehousing rose along with wholesaling and manufacturing having a 0.8 percent grow in November, a sign manufacturers are starting to reap the full benefit of the Canadian dollar’s 11 per cent decline during the last year and increasing demand in the U.S.

 Bloomberg.com