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Canadian economy expands in Q1 as household spending, investment rise

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Canadian economy expands in Q1 as household spending, investment rise

The Canadian economy expanded in the first quarter as household spending rose and non-residential business investment rebounded, Statistics Canada reported.

Real GDP grew 0.1% on a quarterly basis, matching the previous quarter's growth rate.

Household spending rose 0.9%. Business investment in nonresidential structures and machinery and equipment bounced back 3.2% in the first quarter. Imports rose 1.9% while exports declined 1.0%. Meanwhile, housing investment slipped 1.6%.

Compared with the year-ago period, real GDP at an annualized rate expanded 0.4%, missing the Econoday consensus expectations of a 0.7% growth.

The Bank of Canada in April trimmed the real GDP growth forecast to 1.2% for fiscal 2019 from 1.7% estimated previously. It expects the economy to post a soft growth in the first half owing to weak investment and exports, but pick up in the second half.

After a brief contraction in February, an upside surprise in the first quarter may lead the central bank to maintain its key rates in 2019, ING Economics suggested.