"Today's data are a clear negative for the October GDP outlook, supporting our view for a meaningful slowdown in fourth-quarter growth from the third quarter's firm pace".
- Nick Exarhos, CIBC Economics
Canadian manufacturing sales dropped unexpectedly in October, suggesting economic growth slowed in the Q4, official figures revealed on Thursday. According to Statistics Canada, the country's manufacturing sales fell 0.8% after rising 0.3% in September, while markets expected sales to climb 0.7% during October. That marked the biggest drop since March 2016, when manufacturing sales plunged 0.9%. Data showed sales decreased in 15 out of the 21 industries, accounting for 61% of the Canadian manufacturing sector. In volume terms, manufacturing sales dropped 1.7% in the reported month. Sales in the primary metal industry decreased 2.4%, whereas sales for petroleum and coal products plunged 1.7% in October.
The Canadian economy expanded 3.5% on an annual basis in the Q3 after shrinking 1.6% in the Q2 on the back of the Alberta wildfires. The Bank of Canada , which cut its interest rates twice last year, left interest rates on hold last week but pointed to sluggish economic growth. Back in October, the Central bank revised down its Q4 economic growth forecast to 1.5% from the originally reported 2.8%.
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