Canada’s gross domestic product expanded at the fastest pace in seven months in November on gains in manufacturing, mining and energy.
Output grew 0.3% to an annualized C$1.56 trillion ($1.56 trillion), following a prior gain of 0.1%, Statistics Canada said today in Ottawa. The median forecast in a Bloomberg economist survey was for a 0.2% expansion in the month.
The report suggests growth accelerated in the fourth quarter from the 0.6% annual pace seen from July through September, in contrast to the U.S. where output shrank at a 0.1% pace at the end of last year. Canada’s expansion has been supported by the job market, with the unemployment rate falling to a four-year low in December.
“We are still looking for growth of about 1% for the fourth quarter,” said Robert Kavcic, a Bank of Montreal economist in Toronto. “I don’t think it really changes the story too much for us.”
The Canadian dollar rose 0.2% to 99.97 cents per U.S. dollar at 10:34 a.m. in Toronto. One Canadian dollar buys $1.0003 U.S. Canadian two-year bonds rose, with the yield falling one basis point to 1.16%.
Manufacturing grew 0.7% in November, rebounding from a 0.9% decline the prior month. The mining, oil and gas category grew 0.8%.
Exxon Mobil Corp. and four partners said Jan. 4 they will spend about $14 billion to develop the Hebron oil field off Newfoundland, to produce more than 700 million barrels of crude during its lifespan.
Most other industries made little contribution to economic growth in November. Construction was little changed, Statistics Canada said, while retailing recorded a 0.6% gain as automobile receipts rose. Wal-Mart Stores Inc. said Jan. 22 it will spend C$450 million to add or renovate stores in Canada.
Consumer spending is being supported by recent job gains including the 59,300 increase for November, said John Clinkard, chief Canada economist at Deutsche Bank AG in Toronto.
“This is a factor which should support the first half of the year because those people are going to buy stuff,” he said by telephone. “We are still looking for a rate hike by the end of this year because the basic projectors of growth in Canada seem to be reasonably intact.”
Bank of Canada Governor Mark Carney said Jan. 23 an increase to his 1% benchmark interest rate is “less imminent” and cut his fourth-quarter growth prediction to 1% from 2.5%.
Prime Minister Stephen Harper said yesterday his Conservative government will make the economy and families his main focus in the session of parliament that opened this week. Speaking to party members, he said taxes “must remain low” and the expansion has benefited from strong gains in full-time private-sector employment.
In a separate report, Statistics Canada said today its index of raw-materials prices paid by manufacturers dropped 2% in December from November. Economists in a Bloomberg survey had a median prediction of a 0.3% increase.
The industrial product price index, which measures what manufacturers receive for their goods, was unchanged in December, matching the median of economist forecasts.
Industrial prices rose 0.5% on average last year while raw materials costs fell an average 6.3%, Statistics Canada said, suggesting factory profit margins widened.