At 0.1%, real GDP edges above expectations for April

By Staff, with files from The Canadian Press | June 29, 2018 | Last updated on June 29, 2018
2 min read

Statistics Canada says real gross domestic product edged up 0.1% in April over the previous month.

Economists had expected no change, according to Thomson Reuters Eikon. The increase came as output of goods-producing industries rose 0.2%.

Gains in the manufacturing and utilities sectors more than offset declines in construction and in mining, quarrying, and oil and gas extraction.

Activity in the manufacturing sector rose 0.8% in April as the output of both durable and non-durable manufacturing grew.

Services-producing industries were essentially unchanged overall for the month.

This data “comes on the heels of two solid months, and sets up Q2 to be a roughly 2.5% [for the] quarter, good enough to keep the Bank of Canada on target for our forecast July hike,” says Avery Shenfeld, managing director, economics, for CIBC World Markets, in a Friday statement.

He’s bearish on fixed income and bullish on the loonie, which also supports his expectations for the rate hike.

Derek Holt, vice-president and head of Capital Markets Economics for Scotiabank, says, “The market moved to price in about 85% odds of a BoC hike on July 11th […],” in his Friday note. “The figures were not expected to influence the BoC’s […] decision but they certainly don’t hurt either, especially given StatsCan guidance on weather disruptions that held back broad forms of economic activity in April,” he adds.

Holt points out that StatsCan is “fairly aggressively blaming weather distortions that cut both ways, ” largely “as an explanation for why growth was not stronger yet.”

Read:

Trade, mortgage lending rules to ‘figure prominently’ in next BoC rate decision

How shaky manufacturing affects economy, BoC

The Canadian Press logo

Staff, with files from The Canadian Press

The Canadian Press is a national news agency headquartered in Toronto and founded in 1917.