Manufacturing leads charge as real GDP up in January: StatsCan
Agency says sector's output expanded 1.2 per cent in January following 1.9 per cent December decline
OTTAWA—A surprisingly strong manufacturing sector was the major driving force behind the Canadian economy’s return to modest growth in January after ending 2012 with a mild contraction in December, according to Statistics Canada.
The federal agency reported Canada’s gross domestic product grew by 0.2 per cent in the month after shrinking 0.2 per cent in December.
Manufacturing was the biggest contributor, with the sector’s output expanding 1.2 per cent in January following a 1.9 per cent decline in December.
CIBC World Markets economist Emanuella Enenajor said the Statistics Canada report was slightly above the consensus estimate, with the manufacturing sector showing surprising strength given previous reports of softer sales.
“While today’s data suggest Q1 GDP could track somewhere in the neighbourhood of 1.5 per cent—an acceleration from the pace seen in prior quarters, that’s still softer than the Bank of Canada’s outlook,” Enenajor said in a brief note.
In the central bank’s latest outlook, the Bank of Canada says it expects growth to gain momentum as the year progresses and result in 2.0 growth in GDP this year followed by 2.7 per cent growth in 2014—more optimistic than other estimates.
The Organization for Economic Co-operation and Development said it expected the Canadian economy to expand 1.1 per cent in the first three months of this year and by 1.9 per cent in the second quarter.
Statistics Canada reported that Canadian goods production in January grew 0.4 per cent as mining, quarrying and oil and gas extraction also increased while there were declines in agriculture, the forestry sector and construction.
The output of service industries was up 0.2 per cent in January, mainly as a result of gains in wholesale trade, arts and entertainment and the public sector.
Enenajor said that the gains in arts and entertainment probably reflected the return of NHL hockey after the National Hockey League and its players union reached a contract settlement and began a shortened playing season.