"In the wake of the U.S. budget showdown, all measures that make up the Canadian index showed some negative pressure this week"
- Nik Nanos, chairman of Nanos Research Group
While politicians in the White House are failing to make the consensus on budget, the government shutdown is starting to weigh on other global economies. Hence, sentiment among Canadian consumers fell for the first time in more than a month amid budget disputes in the neighbouring United States, prompted views of the economy to deteriorate. A gauge, measuring of economic mood of Canadians, tumbled to 59.04 in the week ended October 4, from 59.75 a week earlier. This is the first drop since August 30, which tracks Canadians' perceptions of the strength of domestic labour market, real estate and their personal financial situation.
In a separate report Statistics Canada said the number of building permits plunged in August from the preceding month on a decline in commercial projects. Canadians are planning to build less offices, shopping malls and hospitals, while Toronto registered the steepest fall in construction activity. Domestic municipalities approved building permits worth just $6.3 billion, 21.2% less than in the previous month. Despite July's strong reading, August's drop indicates non-residential sector will not start leading economic growth in the foreseeable future, while growing tensions in the White House may become a bigger drag on Canadian economy in case shutdown will last for couple of weeks.
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