Canada: GDP growth eases in April on a weak manufacturing sector
June 30, 2017
Following a strong Q1, the pace of economic growth eased in the first month of Q2. Seasonally-adjusted GDP growth came in at 0.2% in April, shy of the 0.5% month-on-month expansion recorded in March. April’s print was the sixth consecutive month of expansion—a streak last seen in 2014—and met analysts’ expectations of a slight cool-off. Nonetheless, the economy remains on track to meet the Bank of Canada’s revised GDP growth target for the year (+2.8%).
April’s print, released by Statistics Canada, recorded growth across 14 of the 20 included sectors. Goods-producing industries experienced null growth as a stronger performance in the mining, quarrying, oil and gas sector was largely offset by a decline in the manufacturing sector. Meanwhile, the construction sector grew for a sixth consecutive month as growth in non-residential construction offset a decline in residential building; the first slowdown for homebuilding in six months came in the same month that the Ontario government introduced measures to cool the overheating Toronto property market. Moreover, service-producing industries recorded growth as professional and financial services notched expansions. Both wholesale and retail trade sectors also performed modestly in the month.
On an annual basis, GDP growth inched up to 3.3% in April (March: +3.2% year-on-year) and posted the strongest reading since June 2014. Meanwhile, annual average GDP growth edged up to 1.9% from 1.7% a month earlier.
Author: Christopher Thomas, Economist