Canada February GDP - Unexpected dip, but March seen slightly firmer
February Canadian GDP is weaker than expected with a 0.2% decline, when the preliminary indication with January’s report had been unchanged. This could be a sign of tariffs starting to hurt, but the preliminary estimate for March is actually positive, with a rise of 0.1%.
The weakness of February may be in part corrective from an above trend 0.4% increase in January, with mining in particular at -2.5% erasing a 1.9% January rise, leading a 0.6% correction lower in goods after a 1.1% January rise. Manufacturing however saw a second straight rise, by 0.6% after a 1.0% rise in January.
Services fell by 0.1% after a 0.1% rise in January. Transportation/warehousing, arts/entertainment/recreation and accommodation/food services all fell by at least 1.0%.
March data is seen showing gains in mining, retail and transportation/warehousing, partially offset by declines in manufacturing and wholesale. This implies a Q1 GDP increase of around 1.5% annulaized, slightly below a recent 1.8% Bank of Canada estimate.
