August 2019 – Canadian economy rose by 0.1%

According to the recent report by Statistics Canada, the national economy showed only a 0.1% growth in August, affected by a recovery of manufacturing segment and an increase in services-producing industries. It’s slightly lower than specialists predicted.

Reuters survey shows that analysts expected a 0.2% gain, following no change in July. The report says 14 of the 20 industrial sectors showed increases, but 6 saw drops.

The results appeared after the central bank, which has been on pause since October 2018, kept its key lending rate unchanged this Wednesday once again, but cut its global growth forecasts because of strong international trade conflicts.

“The sources of bad influence may change each month, but Canada’s economy still shows mediocre performance,” - noted CIBC Capital Market’s Avery Shenfeld.

“Although the Bank of Canada predicts weak results in the fourth quarter, there’s still a chance to change that in case monthly growth keeps varying from 0.0% to 0.1%,” - he added.

August saw Canada’s manufacturing sector growing by 0.5%, mostly due to higher sales, following passive July. The report says durable manufacturing was up by 1.0%, but non-durable manufacturing fell by 0.2%.

Meanwhile, oil and gas extraction were down by 1.6%, and oil sands extraction also contracted by 3.6%, marking the fourth consecutive month of decreases, caused by facility maintenance shutdowns.

In addition to it, Statscan says producer prices fell unexpectedly by 0.1% last month, pushed down by lower prices for meat, fish and dairy products. At the same time, raw materials prices showed no changes following an August decline by 1.8%.