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ECONOMIC NEWS François Dupuis, Vice-President and Chief Economist Hélène Bégin, Senior Economist • Benoit P. Durocher, Senior Economist • Francis Généreux, Senior Economist Desjardins, Economic Studies: 514-281-2336 or 1 866-866-7000, ext. 5552336 • [email protected] • desjardins.com/economics NOTE TO READERS: The letters k, M and B are used in texts and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. The data on prices or margins are provided for information purposes and may be modified at any time, based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. The opinions and forecasts contained herein are, unless otherwise indicated, those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group. Copyright © 2017, Desjardins Group. All rights reserved. Canada: Real GDP Loses Ground in August HIGHLIGHTS f Real GDP by industry fell 0.1% in August. This result is slightly lower than our forecast (0.0%) and the consensus forecast (+0.1%). f Goods-producing sector production slipped 0.7%. Manufacturing dropped by 1.0% during the month. All of the other goods-producing sectors were down as well. f The service sectors posted a 0.1% gain. This pace was slightly lower than in recent months. COMMENTS Unsurprisingly, Canadian economic difficulties continued in August after practically zero growth in July. On the one hand, the goods-producing sectors retreated significantly; this is largely a reflection of international trade difficulties. On the other hand, service sectors’ growth slowed somewhat to a more sustainable pace after a period of exceptional growth in the first half of 2017. With two out of three months already completed, a clearer picture for the third quarter has emerged. Considering the fairly weak results seen in July and August, the carryover is only around 1.5% for the quarter. Even considering the possibility of a return to positive territory in September, it is unlikely that the third quarter will end with growth higher than 2%. This is a net slowdown compared with the 3.7% and 4.5% increases observed in the first and second quarters. However, this projection is not so bad considering that the growth potential is estimated to only 1.3% for 2017. IMPLICATIONS Given the materializing slowdown of the Canadian economy, we can expect the break from monetary firming to continue for a few more months. The focus will now be on a return to growth in the fall. ECONOMIC STUDIES | OCTOBER 31 ST , 2017 Benoit P. Durocher, Senior Economist GRAPH 1 The carryover is around 1.5% for the third quarter of 2017 Sources: Statistics Canada and Desjardins, Economic Studies Real GDP by industry In 2007 $B 1,645 1,665 1,685 1,705 1,725 1,745 JAN. APR. JUL. OCT. JAN. APR. JUL. OCT. JAN. APR. JUL. Quarterly averages 2015 2016 2017 GRAPH 2 The energy sector continues to catch its breath following May’s sharp increase Real GDP by industry – Energy sector Monthly variation in % -8 -6 -4 -2 0 2 4 6 8 JAN. MAR. MAY. JUL. SEP. NOV. JAN. MAR. MAY. JUL. 2016 2017 Sources: Statistics Canada and Desjardins, Economic Studies #1 BEST OVERALL FORECASTER - CANADA
