Canada Economic Forecast

Canada Economic Forecast

May 28, 2019

The economy was likely fairly tepid in the first quarter of the year. GDP data for February showed a contraction in economic activity, amid production curtailments in the energy sector, while the manufacturing PMI averaged lower than in Q4. However, Q1 retail sales posted a slight improvement from the prior quarter, which suggests private consumption likely gained impetus. Growth should pick up somewhat in Q2, although indicators are mixed. On one hand, the manufacturing PMI in April posted the lowest reading in over three years. On the other, housing starts unexpectedly surged in April, which bodes well for residential investment, while, in the same month, the unemployment rate dipped and the economy added a record number of jobs. On the political front, on 17 May President Trump agreed to lift tariffs on Canadian steel and aluminum, which should boost business sentiment going forward and facilitate the ratification of the USMCA.

Canada Economic Growth

Economic growth will likely ebb noticeably in 2019 compared to last year, amid a moderating global growth outlook, anemic domestic demand, production curtailments in the energy sector and weaker export growth. Elevated household debt and volatile oil prices pose downside risks. Met the why particular analysts expect growth of 1.5% in 2019, which is down 0.1 percentage points from last month’s forecast, and 1.7% in 2020.

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Canada Facts

ValueChangeDate
Bond Yield1.501.00 %Jun 12
Exchange Rate1.330.15 %Jun 13
Stock Market16,2390.23 %Jun 13

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