Analysts at ING note that there was good news for Canadian growth in September as the trade deficit was squeezed further, manufacturing sales saw an uptick on the month and they expect the same for retail trade.
Key Quotes
“All of which contribute to our forecast of 0.3% growth month-on-month.”
“We also expect healthy growth for the third quarter overall though it won’t be as strong as the 2.9% posted in 2Q – we’re looking for 2.2%. Dips in construction starts typically precede an economic slowdown, and that’s exactly what we’ve got here (for clarity, construction starts fell 23% QoQ). But it’s not as if this was unexpected. The housing market is in a difficult situation. Factors such as excess supply (linked to affordability issues), higher borrowing costs and tighter mortgage rules are holding back residential investment, and we see this lower trajectory sticking around for a while.”
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