Canada Economic Forecast

Canada Economic Forecast

February 26, 2019

The economy appears to have ended 2018 on a weaker note according to available Q4 data. Economic activity contracted month-on-month in November, dragged noticeably by the wholesale trade and manufacturing sectors, although one-time factors such as postal strikes and extreme weather may well have depressed the headline reading. Moreover, in seasonally-adjusted month-on-month terms, retail sales declined as did annualized consumer credit in December, while manufacturing sales fell throughout Q4. Looking ahead to Q1, momentum remains dim, with January’s Markit manufacturing PMI posting the weakest expansion in over two years. In the same month the housing market was soft, and the unemployment rate grew, albeit, due to more people looking for work. More positively, Alberta recently decided to increase its oil production cap for February and March, which should support the oil sector in Q1.

Canada Economic Growth

The economy is projected to moderate in 2019, with higher interest rates likely dampening domestic demand. That said, ratification of the USMCA should reduce uncertainty surrounding trade with the U.S. and, in turn, support mainstay export industries. Elevated household debt, a slowing housing market and global trade tensions pose downside risks to the outlook. Met the why particular analysts expect growth of 1.8% in 2019, down 0.1 percentage points from last month’s forecast, and 1.8% again in 2020.

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Canada Facts

ValueChangeDate
Bond Yield1.721.00 %Mar 19
Exchange Rate1.330.15 %Mar 20
Stock Market16,1680.23 %Mar 20

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