- Category: Economic
- Published Wednesday, December 23, 2015
- CTV News
OTTAWA -- Canada's economy didn't grow in October, and that has analysts wondering if the central bank could be eyeing another cut to a key lending rate.
Statistics Canada data released on Wednesday showed Canada's economy was stable overall in October as gains in the resource sector helped offset declines in factory production and consumer spending.
CIBC Capital Markets economist Nick Exarhos said the weak results undercut expectations that the Canadian economy had rebounded in October after shrinking in September.
Without the rebound in the mining sector, the country would have seen another economic contraction after September's 0.5 per cent decline, Exarhos said in a brief commentary.
That puts the country on track for flat growth in the fourth quarter, which began in October, and could signal another interest rate cut from the Bank of Canada, he said.
Statistics Canada said Canada's gross domestic product -- a broad measure of the economy -- was flat overall in October.
Commodity-based industries including mining, quarrying and oil and gas extraction posted slight gains after major declines in September, and the public sector grew slightly.
That was offset by declines in manufacturing, retail trade, and utilities. Spending on natural gas and electricity also fell as much of the country experienced mild weather in the weeks before Halloween.
Mining, quarrying, and oil and gas extraction rebounded in October, rising 0.7 per cent after falling 4.7 per cent in September. The use of non-conventional sources of oil such as the Alberta oilsands rose 0.8 per cent after a 10.6 per cent decrease in the previous month.
The finance and insurance sector declined for a third consecutive month, falling 0.1 per cent despite a gains in financial investment services.
Statistics Canada also released data showing October retail sales posted a small rise of 0.1 per cent and actually fell by 0.3 per cent in terms of volume.
Ontario and Quebec posted higher sales in the month, while retail receipts in British Columbia, Alberta and Nova Scotia declined. Alberta, which has been hit hard by the plummeting price of oil, saw its retail sales fall for the third month in a row.