Canada’s gross domestic product rose for a second month in February led by gains for copper and nickel miners, oil producers and manufacturers.
Output rose 0.2 percent to an annualized C$1.61 trillion ($1.47 trillion), Statistics Canada said today in Ottawa. The report matched the median forecast in a Bloomberg economist survey of 20 economists.
The data support the Bank of Canada’s estimate of first-quarter economic growth at a 1.5 percent annualized pace. The central bank cited winter storms that disrupted shipments for the sluggish expansion, and output may have been constrained in March by a strike at the port in Vancouver, Canada’s largest. The bank forecast April 16 that growth will accelerate to a 2.5 percent pace beginning in the second quarter, aided by U.S. demand and a weaker Canadian dollar.
“This growth rate of 0.2 percent is more about your normal footing,” said Dawn Desjardins, assistant chief economist at Royal Bank of Canada in Toronto, by telephone. “We will see a pickup in demand for our exports as we go forward.”
Canada’s dollar fell 0.3 percent to C$1.0974 per U.S. dollar at 9:55 a.m. in Toronto, as the U.S. reported 0.1 percent annualized first-quarter growth with investment and exports falling and consumer spending up the most in 14 years. The consumer gains suggest more about future demand for Canadian goods, Desjardins said.
Mining and quarrying rose by 4.8 percent in February led by copper and nickel work, Statistics Canada said. Oil and gas extraction rose by 0.7 percent led by natural gas output, while the gain in factory production slowed to 0.6 percent from 1.6 percent in January.
ATCO Structures & Logistics said April 25 it won a “multi-million dollar” contract to operate a 1,470 person camp for K+S Potash Canada GP in Saskatchewan.
The economy’s recovery “hinges critically” on a shift in demand from indebted consumers to exports and business investment, which will be aided by a weaker Canadian dollar and rising U.S. orders, the bank said April 16. The International Monetary Fund said earlier this year that Canada should maintain looser policy because there have been few signs of increased exports and company spending.
“Canada’s economy has been doing better, but we expect the excess capacity in the economy will be taken up gradually over the next several quarters,” said Leslie Preston, economist at Toronto-Dominion Bank, in a note to clients. “Canada faces structural challenges in the U.S. market and domestic sources of growth like housing have slowed.”
Forestry and agriculture declined by 1.5 percent in February on reduced crop production, Statistics Canada said, while the National Hockey League’s break for the Olympics contributed to a 5.0 percent decline in the arts and entertainment category, Statistics Canada said.
The agency also said today that manufacturers’ prices and raw materials costs increased less than economists forecast in March.
The raw-materials price index rose 0.6 percent, lagging behind the 1.0 percent forecast by economists surveyed by Bloomberg. The industrial product price index, which measures the price of finished goods, rose 0.4 percent. That index was forecast to rise 0.5 percent.