Canada: 3Q economic growth is expected to cool to 1.7% - TDS

Analysts at TDS suggest that the third quarter Canadian economic growth is expected to cool to 1.7% (q/q, annualized) on a deceleration in net trade.

Key Quotes

“Goods export volumes fell 14% on the quarter, outpacing a modest drop in imports. Consumer expenditures are expected to decelerate to 2.7%. The volatility in housing markets in the wake of Ontario's Fair Housing Plan will translate to a second quarterly contraction (-5.5%). Meanwhile we expect an uptick in business inventories, and non-residential investment (+5.8%) as firms continue a gradual reinvestment process.”

“Industry-level GDP should post a 0.1% increase in September, lending a modest handoff to Q4. Manufacturing output will benefit from a surge in gasoline production. We also look for a pickup in construction and utilities, with the latter driven by a late summer heat wave. Services look softer with retail and wholesale trade weaker on the month, though stronger housing activity should support the headline print.”