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Paul Ferley, assistant chief economist at Royal Bank, pointed to the decline in business investment and a larger-than-expected drop in residential investment as disappointing.

And Ferley said it looks like economic growth in the fourth quarter will be even slower.

“It is looking like right now that Q4 growth could closer to one per cent than two,” he said.

Ferley said he continues to expect an interest rate increase in the first quarter, but that it will be contingent on how the economy fares and if the slowing in the last three months of 2018 proves to be transitory.

The third quarter ended on a weak note as real gross domestic product edged down 0.1 per cent in September. Statistics Canada noted it was the first move lower after seven consecutive months of growth.

The agency attributed September’s decrease to lower output across all goods-producing industries which slipped 0.7 per cent. Services industries edged up 0.2 per cent.

Stephen Brown, senior Canada economist at Capital Economics, said the fourth quarter will get a bit of a boost from the resumption of the Syncrude facility and the inclusion of legalized marijuana in the statistics for the first time.

“But the bigger factor is that the economy faces big headwinds from lower oil prices and weak new home sales,” Brown wrote in a report.

“Both suggest that investment could fall further in the quarters ahead. That will give the Bank of Canada pause for thought and means that a January rate rise is looking less likely than it did a month ago.”