UPDATE 3-Canada GDP growth jumps to 2.5 pct in 1st quarter on exports

Fri May 31, 2013 11:16am EDT
 
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* Strongest growth in six quarters

* Follows weak second half of 2012

* Energy and mining sector main source of industrial growth

* Will it press Bank of Canada to keep tightening bias?

By Randall Palmer

OTTAWA, May 31 (Reuters) - Rising exports helped rouse the Canadian economy from a sluggish second half of 2012 to grow at an annualized rate of 2.5 percent in the first quarter of this year, the fastest pace in six quarters, Statistics Canada reported on Friday.

The real growth rate was well above the Bank of Canada's forecast in April of 1.5 percent, topped the median projection of 2.3 percent in a Reuters survey and outpaced U.S. growth of 2.4 percent for the quarter. Statscan also revised up fourth-quarter growth to 0.9 percent from 0.6 percent.

The mediocre performance in the second half of last year had been partially due to temporary factors, particularly in the oil and gas sector in the third quarter, and a rebound in mining, oil and gas extraction became the main source of industrial growth in the first three months of 2013.

"It does suggest what we saw in the second half last year was more of a pause than the start of a new trend. With the monthly numbers continuing to grow through the quarter, it sets us up for a decent second quarter as well," said Royal Bank of Canada chief economist Craig Wright.   Continued...