MNI 5 THINGS: Canada 1Q GDP +1.3%, Below Expected; March +0.3%>

By Courtney Tower

     OTTAWA (MNI) - Following are the key points made in the Statistics 

Canada account Thursday of GDP in Canada for the first quarter this 

year: 

     -- First quarter annualized GDP growth of 1.3% was below analysts' 

expectations of a 2.0% growth, marking the weakest performance since the 

second quarter of 2016, when the Alberta wildfires weighed on activity. 

Growth overall was moderated by household spending that grew 0.3% on the 

quarter, the slowest pace since the first quarter of 2015, lower exports 

of non-energy products (-1.0%), and a 1.9% decline in housing 

investment. Household consumption contribution to GDP declined to 0.6 

percentage points in the first quarter from 1.2 points the previous 

quarter. 

     -- On a monthly basis, however, GDP by industry was up 0.3%, above 

analysts' expectations of 0.2%. The gains were led by the goods sector 

(+0.6%), as mining, quarrying, and oil and gas extraction rose 1.9%. GDP 

growth excluding energy actually slowed to 0.1% from 0.3% in February. 

Other goods subsectors mostly posted gains, except construction (-0.1%). 

The services industry was up 0.2%. 

     -- For the first quarter, exports of goods and services at +0.4% 

were overwhelmed by imports of +1.2%. Non-energy exports fell 1.0%, 

while energy exports rose 5.7%. Exports of crude oil and bitumen (+9.9%) 

largely contributed to export gains, in which services grew 1.7% while 

goods exports, despite the crude oil and bitumen increases, rose only 

0.2%. There was a large decline (-18.8%) in exports of refined petroleum 

energy products. 

     -- Business investment in machinery and equipment increased 4.2%, 

with industrial machinery and equipment growing by 3.9% while motor 

vehicles grew 12.5%. The Bank of Canada sees increases in imports of 

machinery and plant equipment as harbingers of greater manufacturing 

productivity and export competitiveness. Businesses added C$15.2 billion 

to their inventories in the first quarter after an accumulation of 

C$15.9 billion the previous quarter. 

     -- Housing investment fell 1.9%, the largest decline since the 

first quarter 2009. The drop was indicated by a 13.5% decline in the 

various services costs associated with home sales. Business outlays on 

new home construction slowed to 1.2% growth, while renovations increased 

1.4%. Residential investment trimmed GDP by 0.6 percentage point in the 

first quarter, after adding nearly 1.0 point in the fourth quarter. 

 --MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

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