MNI 5 THINGS: Canada GDP Beats Expectations On Oil Rebound>

--5 Things We Learned From Canadian GDP Data

By Yali N'Diaye

     OTTAWA (MNI) - The following are the key points from the February 

data on Canadian GDP by industry released Tuesday by Statistics Canada: 

     - Canada GDP rebounded 0.4% in February after a 0.1% contraction in 

January, more than the 0.3% increase expected by analysts in a MNI 

survey. Gains were widespread across 15 of 20 industries. 

     - The rebound was led by the goods sector, which was up 1.2%, the 

largest gain since May 2017, as mining, quarrying, and oil and gas 

extraction rose 2.4%. Statistics Canada said oil production started 

returning to normal after January's production fell 3.9% due to 

unscheduled maintenance shutdowns. Overall energy was up 1.6%. GDP 

growth excluding energy picked up to 0.3% after edging up 0.1% in 

January. 

     - Elsewhere in the goods sector, manufacturing also contributed 

positively (+1.0%), consistent with the 2.0% real manufacturing sales 

growth over the month. Durables rose 1.8%, with auto manufacturing 

returning to normal after "atypical plant shutdowns" the previous month. 

Non-durable manufacturing was flat. Construction was up 0.7%. 

     - Services edged up 0.1% after being flat in January. The breakdown 

was as expected, with declines in wholesale sales (-0.5% after +0.5% in 

January) and real estate and rental and leasing (-0.2% versus -0.5%, the 

first back-to-back drop since the summer of 2010) offset by gains 

elsewhere. Retail sales rose 0.3% and the public sector was up 0.1%. 

     - While GDP growth was slightly above consensus, the reasons for 

February's recovery were expected and fit into the Bank of Canada's 

scenario of a first quarter soft patch. The data added some upside risk 

to the BOC's projection of a 1.3% annualized GDP growth, but likely not 

enough to alter the central bank's broad scenario at this point. Should 

March be flat, GDP by industry would expand at an annualized pace of 

1.6% in the first quarter after a 2.2% growth pace in the fourth 

quarter. 

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

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