Economic activity in Canada grew by a smaller-than-expected 0.2 per cent in November after posting no growth in October, Statistics Canada said Wednesday.

Economists had expected GDP to rise by 0.3 per cent over the month.  

The latest figures mean that Canada's fourth-quarter GDP isn't likely to rise by the annual rate of 1.5 per cent that the Bank of Canada was forecasting less than two weeks ago.

"Even if December shows a robust bounce-back, the quarter as a whole will be hard-pressed to exceed an annualized growth rate of 1.0 per cent," TD economist David Tulk said in a commentary. He called Q4 a "lost cause" but predicted that growth will improve in 2007 along with the U.S. economy.

Growth in November received a boost from the manufacturing sector, as motor vehicle production grew 14 per cent, following a weak summer and fall.

"This gain was propelled by a robust increase in the automotive and light motor vehicle manufacturing industry, after four consecutive months of decline," Statistics Canada said.

Mining, excluding oil and natural gas, also grew, as did agriculture, forestry, construction and financial services.

However, the energy sector and wholesale and retail trade posted losses. Warm weather played a role in those dips, as did falling oil and gas prices.

"Today’s report suggests that the economy was still struggling to break free from the lacklustre conditions which gripped output for much of last year," said BMO Capital Markets senior economist Doug Porter.

The sluggish GDP report stands in stark contrast to the situation south of the border.

The latest U.S. GDP figures, released Wednesday, show the U.S. economy charged ahead at an annual rate of 3.5 per cent in the last quarter of 2006.