Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Canada's GDP declined 0.3% in April, less than the expected -0.8%, offering a sign that the economy showed continued resilience during a third-wave pandemic lockdown, government figures showed Wednesday.
Statistics Canada also reported a flash estimate for May of another 0.3% decline, far less than the steep drops a year ago when the pandemic first struck. In another positive surprise, the agency also boosted its estimate of March output growth to 1.3% from 1.1%.
The April GDP report showed goods production climbed 0.5% even as automakers struggled with a global microchip shortage, while services declined 0.6% as retailers and real estate brokers were curbed by social distancing rules. Some of those patterns of weakness linked to the lockdowns showed up again in StatsCan's flash estimates for May.
With a majority of Canadians now being vaccinated and most regions lifting lockdowns, the economy may now be headed for a lasting re-opening and a bust of hiring and activity. That resilience is one reason markets see the Bank of Canada tapering QE again at its July 14 meeting to CAD2 billion a week from CAD3 billion, well ahead of other major central banks.
Canada's GDP remains just 1% below its pre-pandemic mark. Industry sources tell MNI they expect a rebound in coming months, but challenges remain such as shortages of goods, struggles hiring back workers, and continued uncertainty on how fast a full re-opening will come.
CIBC and Capital Economics said the report suggests second quarter GDP will come in stronger than they were expecting.
Source: Statistics Canada
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.