Investing.com - Financial Markets Worldwide

Canadian GDP Expands In April

ByThe National Bank of Canada
Published 07/01/2012, 07:20 AM
Updated 05/14/2017, 06:45 AM
FTNMX551030
0.24%
IMOB
-0.77%
FACTS:

Canadian GDP grew 0.3% in April (top chart),one tick higher than consensus expectations. The,goods sector expanded 0.8%, with gains in mining and,energy more than offsetting declines in construction,,utilities and manufacturing. The latter's output fell 0.3%,despite a sharp 3.6% increase in autos production. The,services sector expanded just 0.1% driven by,wholesale, finance/real estate/insurance which more,than offset declines elsewhere including the 0.8% drop,in retail.
Canadian GDP expands in April
OPINION: April’s better-than-expected GDP report,interrupts a four-month period of weak growth. The,bounce back in energy production was expected given,the restart of operations at some plants after earlier,shutdowns. Mining is also coming back, although we're,yet to recover from the sharp drop of February. So,resources are set to give a lift to Canada in Q2 (middle,chart) and somewhat offset softness elsewhere,including the services sector which makes up around,70% of the economy.
Resources sector pick up speed in Q2
The soft retailing data is directly related to consumption,weakness as Canadians are being challenged by weak,income growth (e.g. Q1 disposable income) and a low,savings rate. The manufacturing sector's soft patch is,also concerning. Were it not for autos, the contraction,would have been much more brutal in April.

Growth tracking around 2 in Q2
With the healthy start to the quarter, Canada seems to,be heading for a GDP print of around 2% for Q2,(bottom chart). However, that's still below the Bank of,Canada's last estimate for the quarter and we therefore,expect downward revisions to the BoC's forecasts for,both growth and inflation in July's Monetary Policy,Report. That would set the stage for more dovish,language from Governor Carney. The weakness in,domestic demand cannot be ignored.

Latest comments

Loading next article…
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.