Canada: GDP forecasted to remain unchanged in January - TDS

According to analysts at TD Securities, Canada’s industry-level GDP is forecast to remain unchanged in January, as distortions from Alberta's oil curtailment program cast a shadow over an otherwise decent report.

Key Quotes

“Oil sands production fell by 8.3% (nsa) in January, but will recover gradually over the coming months as inventories normalize and production caps are gradually eased. Outside of the energy sector things look relatively intact, underscored by a broad increase in activity data while a rebound in existing home sales should provide fleeting support to real estate output ahead of the outsized pullback in February.”

“Construction also ought to make a positive contribution on a reported increase in building investment although further deterioration in housing starts, which in February slowed to the weakest pace since 2014, bodes poorly for residential investment going forward.”

“The SEPH report showed an uptick in hours worked earlier this week which should buffer against a negative print on the month, but unchanged GDP in January would still leave Q1 GDP tracking well below BoC estimates.”