Canada: GDP growth surprises to the upside in April
Canada’s economy proved resilient in April, growing 0.1% in monthly terms (March: +0.3% month-on-month s.a.), despite poor weather conditions and on the heels of a streak of downbeat leading data for the month. According to Statistics Canada, growth was driven by stronger manufacturing output and a nascent rebound in the housing market. The reading came in above analysts’ expectations of a flat figure.
April’s print recorded expansions in 12 of the 20 included industrial sectors. Goods-producing industries posted stronger output from a month earlier as the manufacturing sector built up inventories, while the utilities sector notched gains as cold weather drove demand for household heating. That said, the frigid springtime temperatures negatively impacted a number of other sectors in the month, including construction. For its part, oil and gas output posted a third straight monthly rise. Meanwhile, services-producing industries posted stable output as gains in the real estate sector—which have been grappling with this year’s new mortgage-lending rules—were offset by weather-induced losses in retail trade.
On an annual basis, growth dipped to 2.5% from 2.9% a month earlier. Meanwhile, annual average growth was stable from March at 3.4%, the strongest reading in nearly seven years.
Pleased by April’s outturn, Brian DePratto, Senior Economist at TD Economics, noted:
“Another pleasant surprise. […] What’s more, to the extent that weather played a role in holding back growth, we should see an acceleration in May as this factor reverses. All told, we remain comfortable with our second quarter growth tracking of 2.4% [SAAR] – a solidly above-trend figure that is welcome after the soft start to the year.”