‘This puts GDP tracking for the first quarter firmly above 3 percent. It is still early, but all in all there is a lot to like in this report. It really makes it hard to imagine the Bank of Canada sounding overly dovish in April.’ – Andrew Kelvin, TD Securities
The Canadian economy expanded at a stronger than expected pace in January, suggesting that the economy performed well in the Q1 of 2017. Statistics Canada reported that the country’s GDP advanced 0.6% in January, following the preceding month’s 0.3%. Canada’s goods-producing industries expanded for the seventh time in eight months, growing 1.1% in January. Meanwhile, the country’s service-producing industries grew 0.4%, the highest since June 2015. The largest contribution to the January increase was made by the manufacturing sector, which posted a 1.9% expansion. Furthermore, mining, quarrying, and oil and gas extraction grew 1.9% in the reported month, following a 0.5% contraction in December. Wholesale trade climbed 2.4%, the biggest monthly gain since July 2013, while retail sales advanced 1.5%, posting the sixth increase in seven months. Transportation and warehousing expanded 0.8%, whereas the construction sector rose 0.4%. The finance and insurance sector remained unchanged in the reported month, as growth in banking and other depository intermediaries was offset by a fall in financial investment services. Analysts suggest that if the economy maintains the same growth pace going further the BoC will likely increase its key interest rates at the beginning of 2018.
