Canada’s economic growth slows to 1.0% in third quarter

30 November 2010 17:35  [Source: ICIS news]

TORONTO (ICIS)--Canada’s economic growth slowed to a 1.0% annualised rate in the third quarter, down from 2.3% in the second quarter, a government statistics agency said on Tuesday.

The rate for Canada compared with a 2.5% revised annualised growth rate in the US in the third quarter, Statistics Canada said.

Sequentially, Canadian third-quarter economic growth was up 0.3% from the second, following a 0.6% gain in the second quarter from the first, the agency said.

On a monthly basis, however, Canadian GDP growth fell 0.1% in September from August, it said. 

The statistics agency attributed the slower third-quarter growth rate to declining exports and slow housing markets.

Analysts said the Canadian growth data was disappointing, especially when compared with the US.

“Just one percent growth in the third quarter is certainly disappointing,” said Benjamin Reitzes, an economist at Toronto-based BMO Bank.

“Canada has been touted as recovering much stronger than the US, and now we see the third-quarter in Canada at 1.0%, versus a 2.5% rate in the US,” he said.

Also, the decline in September in Canada was "certainly not good news for Q4, either", he added.

Statistics Canada said manufacturing, mining and the public sector were among the drivers for growth in the third quarter.

The increase in manufacturing was concentrated in the production of durable goods, while the strength in mining was attributable largely to higher activity at copper, nickel, lead and zinc mines, it said.

Business investment in plant and equipment rose 6.5% in the third quarter from the second. An increase in consumer spending also contributed to the growth in final domestic demand, the agency said.

In the Canadian chemical industry, sales fell 0.1% in September from August, according to the latest data.

Meanwhile, Canadian chemical railcar shipments are up 23.1% year to date to 20 November.

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