Preview: Due March 31 - Canada January GDP - Flat on the month and near flat yr/yr
We expect January Canadian GDP to be unchanged in line with a preliminary estimate made with December’s data. We expect a positive preliminary estimate for February of around 0.2%, though Q1 is still likely to fall short of a 1.8% annualized Bank of Canada forecast made in January.
We expect January GDP to show services increasing by 0.2% for a third straight month with retail positive but wholesale weaker. Goods are likely to be restrained by a negative in manufacturing and a correction lower in utilities. Goods are more volatile than services which may better represent underlying trend.
This suggests an increase of around 0.2% is likely for February. March could see some downside risk from higher gasoline prices. If March rises by 0.1% Q1 would increase by around 1.0% annualized. The BoC has already recognized that the economy is underperforming its expectations from January. Canada is less vulnerable to the oil shock than most countries with domestic oil output likely to get a lift, though the positive impact would be concentrated in Alberta with most provinces taking a hit.
An unchanged January GDP would see yr/yr growth slip to a marginal 0.1% from 1.0% as a strong rise in January 2025 drops out.