Canada Economic Forecast
June 26, 2018Canada’s economy began the year at a solid pace but moderated somewhat from the fourth quarter of last year as growth in household spending continued to slow. A closer look, however, provided several upsides to the first-quarter reading; non-residential investment ticked up and exports did not fall off as initially thought. That said, it confirmed weakness in the housing market as residential investment plummeted on the implementation of new mortgage-lending rules at the beginning of the year. Meanwhile, available data for the second quarter suggests the market continued grappling with the new guidelines and higher borrowing costs into May, although there were nascent signs that it could soon stabilize. The outlook worsened substantially for trade, however, in recent weeks; the U.S. announced new steel and aluminum tariffs on Canadian imports, which Canada quickly reciprocated. Despite their trivial dollar value, imposing tariffs could signal U.S. intentions in the ongoing renegotiation of NAFTA and open the door to additional tariffs on Canadian automotive and agricultural wares.
Canada Economic GrowthSolid economic fundamentals should support a healthy pace of growth this year. Although household spending will continue to moderate as higher interest rates squeeze indebted consumers, tight labor market dynamics should lift wages. Heavier government spending and stronger oil and gas exports are expected to lend support. Meanwhile, risks to the outlook persist: NAFTA remains in limbo, and the housing market appears fragile. FocusEconomics analysts expect growth of 2.1% in 2018, down 0.1 percentage points from last month’s forecast, and 1.9% in 2019.
Canada Economy Data
5 years of Canada economic forecasts for more than 30 economic indicators.
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|Bond Yield||2.16||1.00 %||Jul 12|
|Exchange Rate||1.32||0.15 %||Jul 13|
|Stock Market||16,561||0.23 %||Jul 13|
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Canada Economic News
June 22, 2018
Seasonally-adjusted consumer prices rose 0.1% from a month earlier in May, matching April’s 0.1% increase.
June 13, 2018
House prices rose 1.0% on a monthly basis in May as the Teranet-National Bank National Composite House Price Index ticked higher, accelerating from April’s 0.2% month-on-month increase.
June 8, 2018
Housing starts on a seasonally-adjusted annualized (SAAR) basis plummeted to 195,600 units in May, according to the Canada Mortgage and Housing Corporation (CMHC).
June 6, 2018
In May, the Ivey Purchasing Managers Index (PMI), prepared by the Richard Ivey School of Business, dipped 9.0 points from April’s multi-year high to land at 62.5 points.
May 30, 2018
On 30 May, the Bank of Canada (BoC) left its target for the overnight rate unchanged at 1.25%, as broadly expected by market analysts.