Canada’s economy shows April GDP gain

The Canadian GDP inched 0.1% higher between March- April, driven by increased output in manufacturing and recoveries in real estate. This was unexpected, as economists predicted a flat April reading from poor weather, and disappointing economic data.

With this recent boost, the Canadian economy is en route to accelerate growth beyond 2%, in the second quarter of the year. This is the third straight month of, with February and March showing growth of 0.4% and 0.3%, respectively.

If the economy maintains this pace of growth, the Bank of Canada’s decision making would be strengthened for any rate potential hike.

BMOs chief economist, Doug Porter says, “while readily acknowledging that a 0.1% rise in headline GDP is not going to send many hearts racing, this actually was a decent result in a challenging month”.

This gain was affected by a 0.8% gain in manufacturing, the first increase in real estate and broker activity since new OSFI regulations came into effect at the start of the year, and a 1.6% increase in utilities; however, the gains were partially offset by a 1.3% decline in retail activity.

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