‘It is a soft month in an otherwise solid quarter. Some moderation was expected after the torrid pace of growth in January.’ – Derek Holt, Scotiabank
Canada’s economic growth remained flat in February as growth in the services sector was offset by weakness in the goods sector. Statistics Canada reported on Friday that GDP growth was flat in the second month of the year, following January’s surge of 0.6% and falling behind market analysts’ expectations for a 0.1% gain. Data showed that the service-providing industries climbed 0.2% in February, with the largest gains registered in the real estate and rental and leasing sector, as well as the finance and insurance sector. However, the 0.2% rise was offset by a 0.3% decline posted by the goods-producing industries, with manufacturing, mining, quarrying and oil and gas extraction contributing the most to the following drop. Back in 2015, the Bank of Canada cut its key interest rates twice amid the strong downside risks. However, the Bank predicted Q1 annualised growth to hit 3.8%. In the meantime, Statistics Canada reported that thanks to January’s gain of 0.6% annualised economic growth would likely come in at 4.2% in the Q1 of 2017 even if economic growth remains flat in March. However, even if Q1 GDP growth meets Statistics Canada’s projections the Central bank will probably remain on hold amid the high degree of uncertainty coming from the US and low capacity utilisation.
