Real GDP Up 0.3% In July
The National Bank of Canada | Oct 25, 2012 04:00AM ET
The Institut de la statistique du Québec re ports that Quebec real GDP at basic prices grew 0.3% in July (Canada +0.2%). It was the strongest monthly gain since December (top chart). The July showing was due in large part to a 2.1% jump in manufacturing output, to which plastic and rubber products (+7.0%) and metal products (+10.6%) contributed the most. Total services output edged up 0.1%. Eight of 13 sectors showed a gain, with the main contributions coming from retail trade (0.8%) and finance, insurance, real estate services and leasing (0.3%).
OPINION: This morning’s report is reassuring in its confirmation that Quebec GDP has clearly topped the peak of last December. It also reports Q1 and Q2 growth slightly less anemic than previously estimated – 0.7% annualized in Q1, revised up from 0.5%, and 1.0% in Q2, revised up from 0.8%. Nothing to write home about – the 12-month expansion was a mere 0.6% (middle chart – Canada 1.9%). In particular, manufacturing output was barely greater in July than in the average month of Q2 2010, nine quarters ago.
Ontario manufacturers, meanwhile, produced 6.6% more in Q2 2012 than in Q2 2010. Only about a quarter of the Ontario gain was from the automotive industry; other industries made contributions just as large. During this time, Quebec posted large declines in production of pulp and paper, food and beverages and chemicals. The July report puts Quebec GDP on track for a Q3 expansion of 1.4% annualized in Q3. More will be needed for the province’s economy to achieve 1% growth in 2012.
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