Canada’s economy grew 1.3 per cent during the third quarter of the year.
The GDP data from Statistics Canada were in line with estimates, but weaker than the previous quarter.
“Canada's third quarter was another so-so result, with this quarter's growth rate also in line with the average pace we've seen in the past year or more,” said Avery Shenfeld, chief economist at CIBC World Markets, in a note.
“The 1.3% annualized growth matched both consensus expectations and the Bank of Canada forecast, although it had some surprises in the composition. Consumer spending didn't improve as much as we expected (up 1.4%), but there were hefty gains in business capital spending and homebuilding to offset that, with inventory destocking and exports dropping to keep the headline in check.”
Real estate accounted for 0.9 per cent of growth. Housing investment rose 3.2 per cent, the fastest pace since the first quarter of 2012. New construction and resales in Ontario and B.C. were key drivers.
Business investment was up 1.4 per cent — higher than the 1 per cent in the previous quarter.
Household spending was also higher at 0.4 per cent, compared to 0.1 per cent in Q3.
Compared to the previous month, GDP is up 0.1 per cent.
“This was the third month in a row of 0.1 per cent gains, and gives just a modest hand-off for Q4 growth. While we are expecting a repeat performance for Q4... the now-ended CN strike presents a bit of downside risk to the quarterly call,” said Douglas Porter, chief economist at BMO Capital Markets, in a note.
Simon Harvey, FX analyst at Monex Canada, says an interest rate cut next week is off the table.
“However, questions remain over how long the economy can continue to buffer the deteriorating external conditions,” he told Yahoo Finance Canada.
“We believe the central bank will need to see a downturn in multiple data points before they are forced into an insurance rate cut, putting a bias on such an accommodative shift towards Q2 2020 – but that is dependent on no material improvement in US-China trade tensions.”
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.