Canada's economy unexpectedly contracted at the start of the fourth quarter due to widespread weakness in the manufacturing sector and a decline in oil and gas extraction, data from Statistics Canada showed on Friday. The gross domestic product was down 0.3 percent in October, falling below economists' expectations for no growth. September was revised slightly higher to growth of 0.4 percent from an originally reported 0.3 percent.
The decline in October came after four consecutive months of growth and was likely to reinforce expectations that the economy slowed at the end of the year following a strong rebound in the third quarter. Output in the manufacturing sector fell by 2.0 percent, the largest decline since December 2013, on a lower volume of exports. Both durable and non-durable manufacturing were down.
Oil and gas extraction was down 2.5 percent, pulling back after four months of gains. The support sector for the petroleum and mining industry rose 4.4 percent on stronger drilling activity, but it was still well below what it saw in early 2015 as the oil price shock began to pinch. Weaker construction also weighed on the economy with the sector down 0.5 percent, its fifth decline in six months. Residential construction fell 1.0 percent as builders broke ground on fewer homes.
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