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

Second dump site of Dungeness crab discovered

DFO confident new site related to April 2 dump of 250 more crab

Nisga’a leader named UNBC chancellor

Dr. Joseph Arthur Gosnell is the first Indigenous leader to assume the role

Northwest local governments team up to fill in future employment gaps

Around 17,000 jobs will need to be filled in the region over the next eight years

Housing affordability in Northern B.C. sees slight improvements: report

Higher paying jobs mitigating effects of increased housing prices, Realtor says

Repen: FOI data proves Telkwans being ripped off by ICBC

Former Telkwa mayor received a response from ICBC and says the results don’t look good for residents

VIDEO: Killer whales hunt for seals in Vancouver harbour

Bigg’s killer whales feed on marine mammals like seals, sea lions, dolphins and even other whales

VIDEO: B.C.’s waving granny gets incredible send-off from school kids

Tinney Davidson has been waving at students on their way to school for over 11 years, but is moving in a month

Struggling B.C. adoption agency elects new board that intends to keep it open

The previous board announced that Choices would close May 31

Vancouver man, 19, charged in human trafficking case involving teen girl

The 16-year-old girl was reported missing and later discovered in Vancouver

Blaine, Wash. inn owner, charged with smuggling people into B.C., granted bail

Robert Joseph Boule ordered to turn away anyone indicating a plan to enter Canada illegally

RCMP arrest B.C. man following threatening Vaisakhi Facebook post

Post made reference to pressure cooker bomb at massive Surrey parade

Northern B.C. high school student reaches 100,000 followers on YouTube

Voice actor, animator, Jericho Fortune has more than 30-million views on his channel GTAGAMER222

University mourns student who died in B.C. canoeing accident

Andrew Milner, 19, was in his second year with the University of Calgary’s basketball program

Most Read