Sluggish April GDP confirms Canadian economy is slowing

Fri Jun 28, 2013 10:54am EDT
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By David Ljunggren

OTTAWA (Reuters) - Canada's economy grew by just 0.1 percent in April from March, Statistics Canada said on Friday, confirming that after a strong first quarter, growth is slowing amid continuing global economic uncertainty.

Although April marked the fourth consecutive month-on-month gain, it was the smallest of the four increases. The figure matched analysts' expectations.

"(This) is no big surprise and fully consistent with the slow-motion expansion Canada now finds itself in. The modest April gain almost precisely matches the average increase seen over the past year," BMO Capital Markets chief economist Doug Porter said in a note to clients.

The Bank of Canada forecasts that second-quarter growth on an annualized basis will be 1.8 percent, down from the 2.5 percent in the first quarter.

The output of service industries expanded by 0.3 percent in April. Goods production fell by 0.3 percent on a decline in mining, quarrying and oil and gas extraction.

Porter and other analysts said second-quarter growth would be also hurt by major floods that hit Canada's oil capital last week, as well as a construction strike in the province of Quebec.

The Canadian dollar briefly pared its losses following the release of the data, before weakening back to C$1.0500, or 95.23 U.S. cents. It finished Thursday's North American session at C$1.0475 versus the U.S. dollar, or 95.47 U.S. cents.

The report showed wholesale and retail trade advanced by 0.6 percent and 0.5 percent, respectively, while the finance and insurance sector grew by 0.6 percent.   Continued...

Shelves are stocked at Target's store in Guelph, Ontario, March 4, 2013 as the American retail giant prepares to open its first three pilot stores in Canada on March 5. REUTERS/Geoff Robins