Canada: GDP growth to hit 4.2% q/q in Q1 – RBC CM

Analysts at RBC Capital markets are looking for Canadian GDP growth to hit 4.2% q/q in Q1, following gains of 2.6% and 3.8% in the previous two quarters.

Key Quotes

“Domestic demand has been firm across the board in the quarter, with household consumption (1.4pp), non-residential investment (+1.0pp), residential investment (+0.7pp), and the government sector (+0.7pp) all indicating very solid contributions. A 3.5pp detraction from net trade (on strong import growth) should be offset by an increase in inventories. The 4.2% aggregate gain is broadly in line with the BoC’s 3.8% projection from the April MPR.”

“Consistent with our Q1 figure, we see March GDP rising 0.2% m/m on strong activity reports and a return to seasonal (i.e., colder) temperatures in the month. A supply disruption at a major oil sands producer late in March may put downward pressure on mining, though this should appear in earnest in April.”