Canada: GDP is expected to bounce back – BMO CM

Benjamin Reitzes, Canadian Rates &  Macro Strategist at BMO Capital Markets, explains that Canada’s March GDP is expected to bounce back after growth came to a halt in February.

Key Quotes

“Our call for a 0.2% increase is driven by gains in retail sales, wholesale trade and manufacturing activity. Home sales were higher in the month as well, pointing to a positive contribution from real estate. However, with housing activity in Toronto (and likely much of Ontario) apparently cooling, this sector could be a drag on growth (or at least much less of a positive) over the next few months. Mining, oil & gas is a big question mark, as a mid-month fire at Syncrude shut down about 350k bpd of production in the second half of the month (and all of April).”

“While there tends to be seasonal maintenance starting in the spring, this pullback in production might be a bit more than normal, introducing some downside risk from that sector (in April, too). Note that hours worked were up sharply in the month, providing some offsetting upside to our call, and leaving the risks balanced overall.”