Canada's economy slowed in third quarter

An oil rig in Canada, which recorded slowing GDP growth in the third quarter of 2019 (AFP Photo/Katie SCHUBAUER)

Ottawa (AFP) - Canada's economy put on the brakes in the third quarter sending growth falling to 1.3 percent, or almost one-third of the previous three months' GDP, the government statistical agency said Friday.

Statistics Canada blamed a drop in exports for the slowdown, noting that it was moderated by an uptick in consumer spending and business investment.

The agency also revised downward its second quarter gross domestic product (GDP) figure to 3.5 percent from its initial estimate in August of 3.7 percent. This expansion was the fastest among Group of Seven industrialized countries.

Canada's GDP in the three months ending September 30 was in line with analysts' forecasts.

With projections of a further slowing in activity toward the end of the year, most economists believe the Bank of Canada will leave its key lending rate unchanged at 1.75 percent when it is announced next week.

"Canada's third quarter was another so-so result," commented CIBC analyst Avery Shenfeld, "with this quarter's growth rate also in line with the average pace we've seen in the past year or more."

Interest rates, he said, were likely "low enough to offset the drag from weak external markets."

According to Statistics Canada, export volumes declined 0.4 percent in the third quarter after rising 3.1 percent in the previous three months, while recent import volumes were flat following a small drop in the second quarter.

Exports of non-metallic minerals and farm and fishing products were down, the agency said. These declines were partly offset by higher exports of metal ores and concentrates, and clothing and footwear products.

Increases in household spending, meanwhile, were largely driven by purchases of new trucks, vans and sport utility vehicles.

Housing investment rose at its fastest pace in seven years, driven by both new home construction and resales -- notably in the hot real estate markets of British Columbia and Ontario provinces.

Business investments in engineering structures, machinery and equipment and intellectual property products were also up.