Canada: Q1 GDP likely to grow by 0.4% - TDS

Analysts at TD Securities are looking for another soft quarter for Canadian economic activity with growth of just 0.4% (q/q, annualized) in Q1.

Key Quotes

“Beneath the repeat headline number should be better details. Imports and other data suggest a rebound of business investment at the start of the year (+7.7%). A healthy labour market likely underpinned a moderate pickup in household spending (+2.1%), notably on services.”

“Conversely, recently revised construction data and soft resale activity point to little growth in residential investment (+1.5%). The key headwind to GDP growth in Q1 will be the sizeable drop in exports (-5.6%), where the quarterly performance was disappointing across most product categories.”

“Offsetting this is an expected jump in business inventories (adding 1.5 p.p. to headline growth) as levels in the energy sector remained elevated post-curtailment and stockpiles elsewhere continued to build.”