Canadian economy grew 0.3 per cent in January, beats expectations

Economists on average had expected no growth for the month, according to Thomson Reuters Eikon

The Canadian economy returned to growth to start the year after contracting in November and December as broad-based growth led by the manufacturing and construction industries offset weakness in the resource sector.

Statistics Canada said Friday real gross domestic product grew 0.3 per cent in January.

Economists on average had expected no growth for the month, according to Thomson Reuters Eikon.

“There are no two ways about this one, as it was quite simply above everyone’s expectations,” said Doug Porter, chief economist at the Bank of Montreal.

“This nice gain augurs very well, given that Alberta’s oil production cuts were viewed as the biggest drag on the economy at the start of the year, and growth sailed right through that headwind.”

The growth came as 18 of 20 industrial sectors moved higher.

Goods-producing industries increased 0.6 per cent, led by growth in manufacturing and construction. The manufacturing sector rose 1.5 per cent in January, while the construction sector grew 1.9 per cent, its best showing since July 2013.

Services-producing industries rose 0.2 per cent as all but one sector increased.

READ MORE: World economy forecast to slow in 2019 amid trade tensions

The better-than-expected result for January came after the economy ended 2018 on a weak note.

Growth in the fourth quarter of 2018 came in at an annualized pace of 0.4 per cent, its worst showing in two and a half years.

The weakness prompted economists to raise concerns about the strength of economic growth this year, while the possibility the Bank of Canada may even look to cut interest rates this year was also raised.

The Bank of Canada kept its key interest rate on hold in its rate announcement earlier this month, but did warn Canadians on of a weaker economic performance in the months ahead.

Weakness in the report Friday could be found in the mining, quarrying and oil and gas extraction sector that pulled back 3.1 per cent.

Oil and gas extraction fell 2.6 per cent, due in part to Alberta’s imposition of oil production cuts that began at the start of the year.

Mining, excluding oil and gas, fell 4.0 per cent.

CIBC chief economist Avery Shenfeld said Friday he’s expecting a more modest gain in February, but noted his bank is raising its first-quarter GDP forecast to 1.3 per cent from 0.5 per cent.

“If that’s on the mark, it’s not slow enough to prompt a Bank of Canada rate cut, but neither is it quick enough to justify a further monetary tightening,” he said.

“Markets had been piling on bets that the Bank of Canada would be pushed into an ease, and today’s data were seen as making that less likely.”

Craig Wong, The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Mural for Sylvan Lake Community Food Bank underway

The 40 foot mural is a paint-by-number design in order to involve the community

VIDEO: Sylvan Lake celebrates 1913 Days

Sylvan Lake’s birthday celebration featured new events and annual favourites, June 14-16

Association of Communities Against Abuse continues to broaden its reach

The Stettler-based organization is set up in 13 other communities throughout East Central Alberta

Plans for public boat launch to Sylvan Lake an eventual project

Lacombe County says they plan to work with surrounding municipalities on the project, eventually

Glass items no longer accepted in Sylvan Lake recycling program

The announcment was made Friday morning, caused by no market left for recycled glass

10 facts about Father’s Day

Did you know that the special day for dads was first celebrated in 1910?

Update: Two shot, two arrested at Toronto Raptors victory rally

The team and several dignitaries, including Justin Trudeau, remained on stage

Oil and gas sector cautious as deadline on Trans Mountain decision nears

Trudeau government expected to announce whether it will approve pipeline for second time on Tuesday

Feds announce $50M strategy to fight dementia

Emphasis is on prevention and and supporting caregivers

Federal Liberals’ plan to help first-time homebuyers to kick in weeks before election

Ottawa to pick up 5% of a mortgage on existing homes for households that earn under $120,000 a year

No business case for Trans Mountain expansion, says former environment minister

Cabinet is expected to announce its decision on the expansion of the Alberta-to-B.C. pipeline by Tuesday

Alberta Mountie found not guilty of dangerous driving causing pedestrian’s death

RCMP Const. Michelle Phillips also found not guilty of dangerous driving causing bodily harm

Three Albertans land ‘monster’ sturgeon in B.C.’s Fraser River

For angler who landed the exceptionally large sturgeon it was an ‘incredible dream come true’

Most Read