By Gordon Isfeld
OTTAWA (MaceNews) – Canada’s economy edged up by a meager 0.1 per cent in the first quarter of 2019, matching the fourth-quarter growth of the previous year, with the weak performance gain coming mainly from higher household spending and investments in machine and equipment, even as exports struggled.
That translates into an annualized pace of 0.4 per cent from January to March, shy of the 0.7-per-cent target level many economists had forecast.
On a monthly basis, gross domestic product fluctuated from a 0.3-per-cent increase in January to a decline of 0.2 per cent in February before gaining 0.5 per cent in March, Statistics Canada reported Friday.
Housing investment declined by 1.6 per cent in the first three months of 2019, marking the fifth straight quarterly contraction in the sector. As well, new home construction was down 3.6 per cent, the federal agency said.
Non-residential buildings, along with machinery and equipment, bounced back by 3.2 per cent between January and March – compared to a decline of 2.5 per cent in the previous quarter.
Meanwhile, export volumes declined by one per cent in the first quarter – the first drop since the third quarter of 2017 – while imports were up 1.9 per cent from a 0.2-per -cent decline in the last quarter of 2018.
As for imports, volumes rose 1.9 per cent in the first quarter, recovering from a 0.2 decline in the previous quarter.
On an annualized basis, Canada’s GDP gain of 0.4 per cent in the first quarter was overshadowed by U.S. growth of 3.1 per cent during the same period.
Overall, the Canadian economy “looks to have woken in the spring from its two-quarter hibernation of almost no growth, only to meet the icy blast of global trade tensions,” said Douglas Porter, chief economist at BMO Capital Markets.
“So, while GDP should rebound in Q2 to above two per cent – our call remains at 2.3 per cent – it is at risk of drifting back into a lull in the second half of the year.”