Canada: GDP rose 0.3% in April - RBC

Josh Nye, senior economist at Royal Bank of Canada, notes that the Canadian GDP rose 0.3% in April (expectations +0.1%) showing further easing in some of the key headwinds that weighed on Canada’s economy in the last two quarters—namely a slowdown in the energy sector and housing.

Key Quotes

“In fact, the mining, oil and gas industry saw one of its strongest monthly increases in recent years as output ramped up alongside higher production limits in Alberta.”

“The increase in April GDP, coming on the heels of a 0.5% gain in March, leaves Q2 growth tracking north of 2% (vs. 0.3% annualized in Q4/18-Q1/19). This return to above-trend growth is happening somewhat sooner than the BoC thought—they’ll likely revise up their Q2 forecast (last at 1.3%) on July 10.”

“The key question is whether rising trade tensions and a softer global outlook will result in downward revisions to domestic growth over the second half of the year.”