Statistics Canada on Friday showed the Canadian economy stalled in August after
zero growth in July. Retail, manufacturing and construction gains were largely
offset by declines in wholesale trade and public administration. Analysts had
forecast August GDP +0.2%. Statistics Canada’s preliminary estimate indicates
September GDP may have contracted 0.1%, which would cut Q3 annualized real
industry output growth to 1.3%. Declines in manufacturing, mining and quarrying
and oil and gas extraction were the main drivers of weakness. The pace would be
well below the BOC’s latest Q3 annualized forecast of 2%. Services output fell
0.1%, with wholesale trade down 1.4% the largest drag; goods-producing activity
rose and partially offset the services decline. Goods production accounts for
roughly one-quarter of Canadian GDP.