Canada: GDP expands in January for a fourth straight month
March 31, 2011
In January, GDP expanded 0.5% over the previous month in seasonally adjusted terms, matching both December's growth and market expectations. On an annual basis, GDP grew 3.3%, down from a 3.6% increase in December (previously reported: +3.5% year-on-year). As a result of the monthly reading, the trend continued to improve, with annual average growth increasing from 3.3% in December to 3.5% in January. The monthly expansion was broad-based, as output increased in 11 of the 18 categories surveyed by Statistics Canada (Statcan). GDP growth was mainly driven by manufacturing, followed by transportation and warehousing as well as wholesale trade. In addition, finance, insurance and real estate services, which account for more than 20% of GDP, also expanded in January. In contrast, mining and oil and gas extraction contracted in the first month of 2011. The Central Bank expects the economy to grow at a seasonally adjusted annualized rate of 2.5% in the first quarter of this year, which is broadly in line with the Consensus Forecast's prediction of 2.6%. For 2011 and 2012, the Central Bank projects GDP growth of 2.4% and 2.8% respectively.