Modest Canada GDP Growth Expected for FebruaryWednesday, April 30, 2014 > 09:23:13
(Wall Street Journal, Paul Vieira, April 29, 2014)
Canadian economic output likely grew again in February, but at a slower pace than January’s strong result, suggesting the rebound from nasty winter weather late last year is losing strength.
The official gauge comes Wednesday when Statistics Canada releases monthly gross domestic product data. Market expectations are for a second straight month of GDP growth — a modest 0.2% month-over-month gain following January’s 0.5% rise.
Economists also suggest there’s a risk the data agency could revise downward January’s reading, as Statistics Canada now says factory shipments, retail sales and wholesale trade didn’t expand as quickly in the first month of 2014 as previously estimated.
Emanuella Enenajor, economist at Bank of America/Merrill Lynch, said February’s gain would represent the materialization of pent-up demand after firms and consumers held back spending amid awful winter weather, especially in December of last year. She said this represents a “temporary rebound,” and as a result, month-over-month expansion in February was likely closer to 0.1%, or a “less impressive print.”
Economists at Bank of Nova Scotia say indicators for the month of February suggest there is still underlying softness in the Canadian economy. For instance, February data for retail sales indicated a 0.5% gain in the month. But, they say, that was entirely attributable to higher prices, as volumes — which economists consider a better gauge of economic activity — recorded a meager 0.1% rise.
February numbers are expected to indicate Canadian GDP is on pace for an annualized gain of roughly 1.5% in the first quarter of 2014, although analysts note March is a wildcard after a strike at the main port of Vancouver likely crippled trade shipments and slowed economic activity in the faster-growing western Canadian provinces.