Canada’s economy gets ‘Christmas present’ with 0.3% GDP growth in October

Statistics Canada says the economy grew 0.3 per cent in October, reversing a 0.1 per cent dip in September and beating economists’ expectations of 0.2 per cent growth.

“Canada’s economy was in bad need of a Christmas present, and October’s return to growth was at least something to put under the tree this week,” CIBC chief economist Avery Shenfeld wrote in a note to clients.

Growth was led by led by growth in manufacturing, finance and insurance, and wholesale trade. Goods-producing industries increased 0.3 per cent after two monthly declines, while services-producing industries also grew 0.3 per cent, their strongest showing since May.

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In a separate report, StatsCan reported that the value of Canadian retail trade rose by 0.3 percent in October from September, thanks largely to higher sales at motor vehicle dealers and gasoline stations.

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Analysts in a Reuters poll had forecast a 0.4 percent gain. Stripping out the effect of price changes, volumes were unchanged in October.

Sales rose in five of 11 subsectors, representing 69 percent of total retail trade.

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Motor vehicles and parts dealers reported a 1.3 percent increase in sales, the third consecutive month of growth. Gas stations recorded a 1.9 percent gain in receipts after two months of declines.

Canada‘s new cannabis retail trade also made a small contribution to overall growth. Pot sales totaled $43 million during the two weeks following legalization in mid-October, or 0.08 percent of the overall total for October.

The overall value of retail sales grew by just 0.6 percent from October 2017, the smallest year-on-year increase since January 2015. StatsCan said this was in part due to unusually high autos sales in October 2017.

— With a file from Global News reporter Erica Alini