31 January 2012 at 13:51 GMT
The Canadian economy surprised consensus by declining 0.1 percent MoM in November against expectations of an increase of 0.2 percent. It was the first time since May 2011 that the economy recorded a monthly drop when it printed -0.3 percent. The annual rate of growth eased to 2 percent from 2.7 percent.
The worse than expected GDP print was driven primarily by a 0.6 percent drop in the goods-producing sector, especially mining and oil & gas extraction was hurt declining 2.2 percent, while services grew 0.1 percent. Therefore, while GDP was worse than expected, the components were not as bad as the headline suggests.
While we do expect the Canadian economy to slow down from 3.2 percent in 2010 and an expected 2.4 percent last year, the leading indicators are holding up well and we expect growth of around 2 percent for the year.
Link to
GDP report.
