- TD
Canada's economy surprised by a stellar performance in January, with gross domestic product increasing the most in two-and-a-half years, boosted by strong manufacturing, retail trade as well as oil and gas extraction. The Canadian economy expanded by a more-than-expected 0.6% in January from the month before, growing for the fourth consecutive month. The figure was twice as much as economists had projected. Goods-producing industries surged by 1.2%, according to Statistics Canada, far better than the 0.4% growth seen in the service sector. Manufacturing grew 1.9% in January, up from a 1.1% increase in December. That indicates that the Canadian Dollar's decline is finally starting to help manufacturing exporters, as economists had predicted. Measured on an annual basis, the economy grew 1.5%, also coming in above earlier projections of 1%.The first quarter is looking better than expected after receiving a great upward momentum from December. Also overall the fourth quarter was up 0.8% compared with the expected 0.1%.
Economists anticipate the BoC to positively revise its 1% forecast for the first quarter in the upcoming April's Monetary Policy Report. BoC Deputy Governor Lynn Patterson said that Canada's economy is diverse enough to move from its commodity focus and achieve a new balance of economic growth.
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