Canada Economic Growth Slows to 0.1 Percent

Canada's economic growth slowed in November, as manufacturers continued to feel the effects of a strong currency while consumer demand spurred growth in the retail and entertainment sectors., Bloomberg 1/31/2008 6:37:12 AM

Gross domestic product advanced 0.1 percent from November, Statistics Canada said today in Ottawa, compared with 0.2 percent the month before. The gain matched the median forecast in a Bloomberg survey of 23 economists. Retailing gained 0.4 percent and manufacturing fell 0.3 percent.

Bank of Canada David Dodge said last week in his last press conference that the economy, which hasn't had a month of negative growth since September 2006, may soon feel the effects of a slowdown in the U.S. The central bank cut interest rates Dec. 4 and Jan. 22 to spur domestic demand, as a strong currency and credit-market turmoil curb exports to the U.S., Canada's main trading partner.

The Canadian dollar is up 19 percent against its U.S. counterpart in the past 12 months, and touched a record 90.58 Canadian cents per U.S. dollar on Nov. 7. The currency has hurt manufacturers by making their goods more expensive abroad, where they send about half their production. It fell 1.2 percent to C$1.0050 per U.S. dollar at 9:09 a.m. Toronto time.

The drop in manufacturing, led by cars and primary-metal products, brought the sector's output level to its second-lowest since the beginning of 2007, the agency said. Twelve of 21 sectors tracked by Statistics Canada lost ground, and most of the gains came in manufacturing of non-durable goods.

Retailers benefited from a ``significant'' increase in computer sales in November that boosted their advance from
Gross domestic product increased at an annual rate of 0.6 percent, down from 4.9 percent in the prior three months, the U.S. Commerce Department said yesterday in Washington. The pace of growth was half that forecast in a Bloomberg News survey and the slowest since the first quarter of last year.

Canada Economic Growth Slows to 0.1 Percent