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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.”