Canada economy shrinks 0.1 per cent in February
Canada’s economy contracted 0.1 per cent in February, according to Statistics Canada.
Economists were expecting between -0.2 per cent to +0.1 per cent, in other words basically flat.
Mining, quarrying and oil and gas extraction fell for the sixth consecutive month and transports fell the most since 2011.
“The surprise versus consensus showed up partially in mining, oil & gas, but after looking at the details that appears to have had nothing to do with oil production cuts,” said Royce Mendes, senior economist at CIBC Capital Markets, in a research note.
“It was actually a broad-based decline in mining and quarrying attributed to weaker international demand that drove that sector.”
Construction continues to grow at 0.2 per cent and utilities were up 1.5 per cent due to record-setting cold weather in Western Canada.
GDP expanded 0.3 per cent in January.
Capital Economics is sticking to its call for lower interest rates.
“Overall, although the first quarter is shaping up to be a little stronger than the Bank of Canada’s bizarrely low 0.3 per cent estimate, we still doubt that the Bank’s hopes of a strong rebound later this year will materialize, which will eventually force it to cut interest rates later in the year,” said Paul Ashworth, chief North America economist at Capital Economics, in a research note
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains
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