Review of Economic Statistics — November 30, 2018 - Transcript
(The Statistics Canada symbol and Canada wordmark appear on screen with the title: "Review of Economic Statistics — November 30, 2018")
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Richard Evans: Welcome to the Review of Economic Statistics. I'm Richard Evans.
Guy Gellatly: I'm Guy Gellatly.
(Text on screen below presenters: "Richard Evans, Director General, Industry Statistics. Guy Gellatly, Principal Researcher.")
Richard Evans: Guy, we're at that point of the data cycle where all the indicators we've been talking about over the last three months come together in the GDP synthesis, the GDP for the third quarter of 2018. So that's what we're talking about today. Recall that second-quarter GDP had accelerated somewhat, largely due to higher export volumes. What happened in the third quarter?
Guy Gellatly: Richard, real gross domestic product grew 0.5% in the third quarter. That follows that 0.7% gain that we had in the second, so slower growth, but basically still a slightly stronger pace of growth that we saw through the second half of last year and into the first part of 2018.
(Text on screen below presenters: "Economic growth slowed to 0.5% in the third quarter, following a 0.7% gain in the second quarter.")
Richard Evans: What was the annualized number?
Guy Gellatly: So, you look at that on an annualized basis. Economic growth in Canada coming in at 2% in the third quarter, and that compares to 3.5% in the United States. So we've basically seen slower growth in Canada compared to the U.S., really since the middle of last year.
(Text on screen below presenters: "On an annualized basis, the economy grew 2.0% in the third quarter, compared to 3.5% in the United States.")
Richard Evans: So, slower than the U.S.? And also a bit of a slowdown compared to our previous performance in the second quarter. Let's look at the categories—the components—what stood out there?
Guy Gellatly: Richard, the key takeaway, I think, from the third-quarter report, is more moderate numbers that we're really seeing across the board. So, you look at household spending, it was up 0.3% in the third quarter, and that's about half the pace of growth that we saw in the second. So, we had some lower spending on durables, and spending on autos was actually down for the third quarter in a row.
Richard Evans: What about housing investment?
Guy Gellatly: Housing investment continued to decline in the third quarter. Big decline there in terms of new residential construction. It was down quite sharply. Basically the sharpest quarterly decline in that series since the second quarter of 2009.
Richard Evans: Okay, so that was notable. But there was some upswing there too related to sales?
Guy Gellatly: Yeah, we had an increase in ownership transfer costs, and that's that measure we have that looks at the volume of activity in resale markets. So, it was up in the third quarter, but it follows some notable declines in those numbers really through the first half of the year.
Richard Evans: Okay, so that's the housing. What about business investment, plants and equipment structures?
Guy Gellatly: So, non-residential business investment, it was down 1.3%, and that's the first quarterly decline in that series. That actually follows six quarters of growth. So, lower spending, business spending, on machinery and equipment a factor there.
(Text on screen below presenters: "Non-residential business investment was down 1.3% in the third quarter, after six consecutive quarterly gains.")
Richard Evans: Now, we kicked this off by talking about exports. What did exports do in the third quarter?
Guy Gellatly: Exports edged up in the third quarter. They were up slightly. We did have that very strong gain in the second quarter. But they were up slightly in third, so a small contribution to growth there. I should note that the import numbers were down on a quarter-over-quarter basis when you look at the imports coming into the country.
Richard Evans: Okay, so that's a good overview of the final demand categories, how we kind of consume all the production. Let's look at how we produced it and look at the industry perspective, where we have a whole slew of industries—logging, manufacturing, distribution, the services. So from that perspective, what were the quarterly highlights?
Guy Gellatly: For the quarter as a whole, in terms of support for GDP growth, I'll note the stronger numbers for manufacturing, higher output in petroleum refineries was a factor there. At the same time, we had lower output, kind of weighing on growth coming from the construction sector, residential construction in particular.
Richard Evans: Yes, as you noted earlier. Now, and while we're on the GDP, the GDP by industry, of course, is available monthly. So, we have September numbers, and we know how the quarter ended. It also gives a sense of how the fourth quarter is about to start. So, how did we end? With a bang? With a whimper?
Guy Gellatly: So, real GDP down 0.1% in September, and it's the first decline in those numbers. That follows seven consecutive monthly increases in that GDP series. So it was down, and it's really coming on lower goods production, so lower oil and gas extraction, manufacturing and construction output in September.
(Text on screen below presenters: "Real GDP edged down 0.1% in September, reflecting declines in goods industries.")
Richard Evans: Very good. So, to sum up, more modest growth in the third quarter and very distributed modest growth.
Guy Gellatly: Yeah, slower across a range of factors.
Richard Evans: Excellent. Well, thank you, Guy. And thank you all for joining us.
(Text on screen below presenters: "www.statcan.gc.ca")
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