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

Gil’s Girls win Harvey Walkus Memorial Ball Hockey Tournament in shootout

This year the tournament was held at the Don Cruickshank Memorial Arena on April 12-14.

LETTER: Homelessness in Port Hardy

“Let’s have that discussion on homelessness in Port Hardy.”

Op-ed: BC’s ferry system

“For years, people living in these communities have been ignored”

Tri-Port Wild hand out year-end awards

The Tri-Port Wild had three all female teams playing minor hockey this year.

Port Alice residents’ input on changes to health centre gets ignored

In ending her letter, Bjarnason called this proposal “an agreed upon model of care.”

UPDATE: Four victims identified in deadly Penticton shooting spree

John Brittain, 68, faces three counts of first-degree murder and one count of second-degree murder

Prince George sweeps to first-ever BC Hockey League crown

Spruce Kings beat Vernon Vipers 3-1 in the Okanagan Wednesday for 13th straight playoff win

Hwang’s first MLS goal lifts Whitecaps to 1-0 win over LAFC

Vancouver picks up first victory of season

Child-proof your windows ahead of warm weather: B.C. expert

Fifteen children were taken to BC Children’s Hospital for falls in 2018

B.C. trucker pleads guilty to lesser charges in fatal Manitoba crash

Gurjant Singh was fined $3,000 and given a one-year driving prohibition.

Study links preschool screen time to behavioural and attention problems

The research looked at more than 2,400 families

Island man guilty of child porn charges, Crown alleges 250,000 images

Psychiatric assessment requested by Crown, sentencing to be set June 4 in Nanaimo court

More than $100,000 raised for family of professional skier who died near Pemberton

Dave Treadway leaves behind his pregnant wife and two young boys

BC SPCA asks public for donations after puppy caught in trap

The puppy’s medical bills are expected to amount to more than $4,600

Most Read