CANADA ECONOMICS: RBC Expects Little Support From Manufacturing In Nov GDP
Recent gains in manufacturing sales are "encouraging" with underlying conditions, including stronger growth in the U.S. economy and a weaker Canadian dollar, still supportive for the sector in the near-term, according to Royal Bank of Canada. With that said, most of the increase in November reflected an outsized jump in aerospace sales, which typically reflect production that has been spread over a number of months and, therefore, will not likely be fully reflected in November GDP estimates, it says.
RBC says along with a slowing in the pace of inventory accumulation, this still points to little support from the manufacturing sector in the November GDP report. Along with the modest dip in the volume of wholesale sales also reported this morning, this points to a likely slowing in GDP growth in November from the 0.3% increases posted in both October and September, it says. Earlier strength, however, leaves the monthly data still tracking in line with its prior monitoring for a 2.6% rise in Q4 GDP that would be down only slightly from the stronger-than-expected 2.7% increase in Q3.