the growth in economy slows down in summer

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Presentation Description Canada’s economic recovery all but flatlined through the summer season, as the high dollar sabotaged the ability of producers to promote their items to foreign markets.


Presentation Transcript

The Growth in Economy Slows Down in Summer : 

The Growth in Economy Slows Down in Summer

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Canada’s economic recovery all but flatlined through the summer season, as the high dollar sabotaged the ability of producers to promote their items to foreign markets. Statistics Canada reported Tuesday that the July to September period noticed the economic system sluggish to a crawl, eking out a one per cent gain in gross domestic product. That’s about half a point less than analysts and the Bank of Canada had been anticipating, and compares unfavourably to the U.S.’s 2.5 per cent advance throughout the identical period. Exports declined 1.3 per cent on a quarter-to-quarter basis, a whopping 5 per cent on an annual basis. The commerce imbalance - imports rose 6.4 per cent annualized - sliced about 3.5 per cent off the gross domestic product. Another major weak point was residential development, which fell an annualized 5.3 per cent annualized. Economists had expected a weak quarter, but not this weak. The consensus was for a progress rate of about 1.5 per cent, while the Bank of Canada had forecast a 1.6 per cent advance.

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TD Bank economist Diana Petramala stated her bank’s view is that Carney won’t transfer once more on interest rates until the 3rd quarter of subsequent year, an opinion shared by Shenfeld. Still, she mentioned she expects the third quarter to have been the lowest of the financial deceleration, and that the 4th quarter will see a modest growth to about two per cent. The markets saw little to like within the GDP numbers, taking it out on the loonie in early morning trade. The dollar fell over 80 foundation points to 97.34 US. Statistics Canada did upgrade second-quarter growth somewhat by three-tenths of some extent to 2.3 per cent, but that impact was offset by a downward revision of the primary quarter to 5.6 per cent from the previously reported 5.8. A part of the surprise was that September, the last month of the quarter, confirmed the economy contracting 0.1 per cent, when a flat or tiny uptick had been expected. The September data can be giving a weak send-off to the fourth-quarter performance, which won’t be known for some time.

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“In a nutshell, this result is a transparent disappointment,” stated Douglas Porter of BMO Capital Markets. Bottom line for the Bank of Canada - there’s zero rush to lift (curiosity) charges again.” For the year thus far, Canada’s financial velocity is barely ahead of the united states. Based mostly on latest efficiency, however, it is no contest - the U.S. financial system advanced by 2.5 per cent within the third quarter, compared to Canada’s one per cent. The welcome news within the report was that, as anticipated, Canadian businesses had been finally benefiting from the high dollar to buy machinery and equipment and gear up for future production. Savings in machinery and gear rose 6.5 per cent in the quarter - 29 per cent annualized - led by purchases in industrial equipment, and computers and different office equipment. On a year-to-year foundation, enterprise funding was up 8.7 per cent, versus the 20-percent decline of 2009. Customers additionally performed their part, spending 3.5 per cent annualized more on services, cars, and clothing and footwear.

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