OPEC Monthly Oil Market Report – October 2017
After GDP growth in 2Q17 confirmed the ongoing recovery in the Canadian economy, the momentum seems
to be well supported.
increased by 5.5% y-o-y, albeit slightly below the July level of
also continued to expand to the considerable level of 7.8% y-o-y in July, comparing
to 7.4% y-o-y in June and 7.3% y-o-y in May, all at a nominal seasonally adjusted level. The
manufacturing rose again to a significant level of 55.0 in September, rising by 0.4 index points from the
August level of 54.6. Another support factor will be the ongoing dynamic in the US economy and the impact
this will have on the Canadian economy, given that the US is Canada’s second-largest trading partner after
China. Taking this positive momentum into consideration, the
forecast for 2017 was revised up
to 2.8%, from 2.5%. GDP growth in 2018 was lifted to 2.1% from 1.9%.
OECD Asia Pacific
After the 2Q GDP level confirmed the good underlying momentum, the dynamic seems to continue with the
latest Tankan Survey levels pointing at also solid economic growth in the 2H17. 2Q17 was slightly revised
down to 2.5% q-o-q SAAR from its previous estimate of 2.6% q-o-q SAAR. While this underscores solid
momentum and the strengthening of the Japanese economy, it is, however, much lower than the first growth
estimate by the Statistical Office of 4.0% q-o-q SAAR for 2Q17. Private consumption, which makes up 60%
of GDP growth, was confirmed at 3.4% q-o-q SAAR, significantly more than in 1Q17, when it only increased
by 1.5% q-o-q. Ongoing ultra-low unemployment and again rising income levels are also supporting inflation,
while it remains to be seen, if this development is temporary. Exports are also rising further and the ongoing
monetary and fiscal stimulus is also providing a sound base for growth in the coming quarter. While 2017 is
almost at its end, the outcome of the upcoming elections that were surprisingly called for by the Prime
Minister to be held 22 October will certainly also have an impact in the near term economic development. So,
political developments will be an influential factor for Japan, not only domestically, but also externally,
considering the latest geopolitical tensions in the Asian region.
was higher in August, increasing by 0.7%, compared with 0.4% y-o-y in July. Tight labour markets
are slowly supporting wage growth, which was up by 0.6% y-o-y in July, the highest level in the past four
months. Core inflation (which excludes food and energy) also showed a better performance as it stood at
0.0% y-o-y in August, the highest level in five months and above the -0.1% seen in July. The
remained at the extremely low level of 2.8% for a third month in a row, a situation that may also lead to
rising wages and acceleration in inflation.
were again a considerable support in August, as external trade rose by a large 18.1%
y-o-y in August after hitting 13.3% y-o-y in July. A strong increase in exports was seen in all main products
but was mainly supported again by the group of industrial goods and capital equipment. Additionally,
continued its recovery, rising for the twelfth consecutive month, up by 5.2% y-o-y in
August, after 4.8% y-o-y in July. This was supported again by a strong trend in manufacturing, which climbed
by 5.4% y-o-y in August, compared with 4.6% y-o-y in July. Manufacturing orders in August point at a
continuation of a solid trend as orders rose by 10.2% y-o-y, after 4.3% y-o-y in July.
However, some deceleration continued in
as the level of retail trade retraced further to
1.7% y-o-y in August from 1.8% y-o-y in July. While it still shows good growth, it is the lowest level since
March. The trend will also depend on wage growth developments but with a slight uptick in consumer
confidence a continuation of a solid trend should be expected.