Economy grows at 3.7% in Q1, fuelled by household spending, business investment

Reuters

Reuters

Canada's economy roared back to life in the first three months of this year, as more business and household spending pushed growth to 3.7 percent, the government's statistical agency announced Wednesday.

On a month-over-month basis, economic output in March rose a solid 0.5% after no growth in the previous month.

"It wasn't really far from broad expectations, but I would say at the margin, it's mildly supportive for the Canadian dollar and slightly moves us another step towards the Bank of Canada raising rates".

And TD Bank senior economist Brian DePratto said there are issues lurking beneath the surface, including evidence that housing markets are beginning to cool off. Nevertheless, we can take comfort that GDP now has grown at an average annual rate of 3.5 per cent over the past three quarters, matching the average quarterly rate in 2013.

"Consumers are likely to keep their wallets open, helped by past gains in housing wealth".

Business investment also increased.

"Macroprudential policy needs to protect the resilience of the household and banking sector", the International Monetary Fund said.

The surge in first-quarter expansion means Canada has shifted from being a laggard among major industrialized economies, as it struggled under lower commodity prices, to emerging as a growth leader.

Meanwhile, household final consumption gained 1.1 per cent in the quarter as spending on transport and in particular the purchase of vehicles led the way. Real estate construction was up 3.7 per cent. Investments in machinery and equipment were up 5.8 per cent, rebounding after declines in four of the five prior quarters.

What's your main takeaway from Canada's Q1 GDP report?

The strong March number "suggests, against the fear of some retrenchment into Q2, this argues otherwise, that you get probably tracking something around the 2 handle growth pace in the second quarter". "That is a serious, legitimate concern and it's something the Bank of Canada is obviously concerned about". It's also at the high end of growth for large rich nations. The figures for the third and fourth quarters were increased to 4.2 per cent and 2.7 per cent compared to earlier readings of 3.8 per cent and 2.6 per cent, respectively.

Recommended News

  • Germany detains Syrian allegedly planning Berlin attack

    Germany detains Syrian allegedly planning Berlin attack

    According to the paper, the teen has been living in a home for unaccompanied minor refugees in Uckermark since 2016. He had told his family he was becoming a jihadist and sent them a goodbye message , officials said.
    Philippines says militants shot dead at least 16 civilians

    Philippines says militants shot dead at least 16 civilians

    Authorities said the militants had killed 19 civilians in Marawi , a mostly Muslim-populated city of 200,000 people. Thirteen soldiers, two policemen and 51 militants have died in the fighting, according to authorities.
    Awkward! Donald Trump 'Shoves' Montenegro PM For Photo-Op, Roasted Online

    Awkward! Donald Trump 'Shoves' Montenegro PM For Photo-Op, Roasted Online

    But Trump said as much, by implication, in his remarks at the unveiling of an Article 5 memorial at NATO's Brussels headquarters. US President Donald Trump ditched the charm for snarls at the G7 Summit. "But some issues remain open, like climate and trade".
  • Intel Has A Credit Card Sized Computer

    Intel Has A Credit Card Sized Computer

    It had a slot for a Compute Card in the side and was easily portable with a carrying handle built right into the top of the case. Weirdly, Intel's most well-known partners, including Lenovo, HP, and Dell, aren't ready to show off their products.

    Trump repeats criticism of Germany, Merkel stands by stance

    Beyond policy issues, his shoving of the Montenegrin prime minister and macho handshakes with Macron deepened the skepticism. There was widespread anger in Germany in 2013 when it was revealed the US National Security Agency tapped Merkel's phone.

    Kevin Love finds it 'funny' that Cavs are underdogs against Warriors

    Apart from the fact that Cleveland won the Eastern Conference this game was marked by LeBron James' record-breaking performance. This could be the Thrilla in Manila - the third bout Ali-Frazier fought on October 1, 1975 - times seven.
  • Disruptive passenger tries to enter cockpit on Malaysia Airlines flight

    Disruptive passenger tries to enter cockpit on Malaysia Airlines flight

    Melbourne Airport remains in a lockdown over the incident and all flights headed there have been diverted to other airports. MH128 landed in Melbourne roughly 30 minutes after the flight took off according to a statement by Malaysia Airlines .

    #MakeAmericaHateAgain: 'Nigger' Spray Painted on Home Owned by LeBron James

    According to the Associated Press , the N-word was spray painted on the front gate of James' home in Brentwood. The property manager was notified and the incident is under investigation, police said.

    Google I/O 2017: Google unveils Android Go for entry-level smartphones

    Google held its annual I/O conference for 2017 on May 17 in Mountain View, the U.S. city where Google has its main office. Google recently released the Google Assistant SDK and third-party actions will soon be made available on the smartphone.
  • Khaldoon Al Mubarak dismisses 'ridiculous' speculation over Aguero future

    Khaldoon Al Mubarak dismisses 'ridiculous' speculation over Aguero future

    Al-Mubarak admits the club will embark on another massive spending spree to land some of the world's biggest stars for Guardiola. There's never been a doubt about that.

    Novak Djokovic To Pick Andre Agassi's Brains After 'Rusty' Start

    The 30-year-old has already reached the magical 10 titles this year at the clay-court events in Monte Carlo and Barcelona. Canadian fifth seed Milos Raonic raced into round two with a routine 6-3, 6-4, 6-2 victory over Steve Darcis of Belgium.

    Macron vows reprisals if chemical weapons used in Syria

    French President Emmanuel Macron (R) and Russian President Vladimir Putin (L) meet for talks at the Versailles Palace, near Paris. Putin called for the removal of the punitive measures, saying they won't help to bring peace to Russia's former Soviet neighbor.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.