Canada: Despite being above expectations, August GDP still points to a slowdown in Q3 – NBF

Data published today in Canada, showed that GDP rose for the seventh consecutive month in August. According to National Bank of Canada’s analysts, Krishen Rangasamy and Kyle Dahms, growth tracking is just below 2% annualized.

Key Quotes:

“Canada’s real GDP rose 0.1% in August. This was better than consensus expectations of a flat print. However, of the 20 broad industrial sectors, only 8 registered increases in output.”

“While August’s GDP was slightly better than expected, the gains were not widespread, with only 8 of the 20 broad industrial sectors seeing higher output. The rebound in oil and gas was expected amidst the restart of some of Syncrude’s operations after a prior outage. Strength in utilities output was also not surprising in light of a warmer than usual August. On the flip side, the manufacturing sector faltered after two consecutive months of growth ─ autos output was affected by atypical plant shutdowns during the month.”

“The services sector was powered by finance/insurance and real estate, much in line with the observed stabilization of the housing market after a rough start to the year ─ recall that home sales bounced back in Q3.”

“August’s GDP report does not change our view that real GDP growth softened to just under 2% annualized in Q3, following a 2.9% print in Q2.“