December 1, 2017 / 1:48 PM / 16 days ago

Canada's economy slows in third quarter as exports fall, businesses pull back

OTTAWA (Reuters) - Canadian economic growth slowed to 1.7 percent in the third quarter, coming off a hot first half of the year as exports tumbled and businesses pulled back on investment, data from Statistics Canada showed on Friday.

The 1.7 percent, an annualized number, was slightly higher than the 1.6 percent forecast by economists, while the second quarter rate was downwardly revised to 4.3 percent from the previously reported 4.5 percent.

For the month of September, the economy grew 0.2 percent, topping expectations and suggesting modest momentum heading into the fourth quarter.

Exports were the main drag on the economy in the third quarter, falling by 10.2 percent on an annualized basis as shipments of vehicles and parts fell amid work stoppages and changes to certain models sent to the U.S. market.

Business investment in non-residential structures, machinery and equipment grew by 3.7 percent, slowing substantially from the second quarter. The Bank of Canada has said uncertainty about North American trade policy is likely dampening business confidence.

The housing sector also weighed on growth, with investment in residential structures down 1.4 percent as ownership transfer costs fell, reflecting slower resale activity.

Reporting by Leah Schnurr; Editing by Steve Orlofsky

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