Canadian economy grows in November 2010…but not manufacturing

The Canadian economy in November posted its strongest performance in eight months, but the manufacturing sector declined slightly, according to the latest figures from Statistics Canada.

The overall gain of 0.4% was slightly above market expectations, StatsCan said, and was the result of a strong performance by the services sector. Oil and gas drilling also played a key role. The 0.4% advance for November was the best monthly performance since March 2010, when the economy grew 0.5%.

Manufacturing declined in November, the agency continued, largely as a result of temporary plant shutdowns for retooling in the motor vehicle assembly industry and shift reductions in the motor vehicle parts industry. Construction also decreased. Manufacturing dropped by 0.8% in November, as large segments of the auto sector were shut down as firms retooled for the 2011 vehicle model year. December is expected to see a bounce back in activity as the manufacturers bring capacity back on line.

Retail trade, meanwhile, grew 1.4% in November after a decline in October. It was the second largest monthly increase in 2010 after the 2.1% gain in March. StatsCan said growth was mostly attributable to clothing and accessory stores, new car dealers, and food and beverage stores.