The latest reading of Canada’s economy brings good news and bad news for the housing market.
While growth slowed in February, to only 0.1% after a 0.3% increase in January, the weakness will almost certainly rule out any increase in interest rates this year.
Statistics Canada GDP figures for the month of April show an almost uniform division between profits and losses among the top 20 industrial sectors. Among the sectors in decline were the extraction of mines and quarries and the extraction of oil and gas; and the manufacturing sector.
“After roaring outside the door earlier this year, the growth of the Canadian economy declined in February. With moderate economic growth, so will the pressures on prices and this will keep the Bank of Canada on the sidelines next year, “said Conference Board of Canada chief economist Alicia McDonald.
He added that the data was in line with the Conference Board’s latest forecast, which expects economic growth to remain subdued in the first quarter.
Finance and insurance decreased by 0.6%, offsetting increases in the previous two months.
Construction rose 0.2%, marking a second gain after seven consecutive declines. This was driven by increases in residential and industrial construction activities.
Real estate, rentals and leases decreased 0.2%, the first decrease since February 2018.
This was affected by activity in agents ‘and real estate agents’ offices, which fell by 6.6%, the fourth drop in five months due to lower resale activity in homes in Ontario, Quebec and British Columbia.
Retail sales also increased in February, recording its highest gain since last May, although the increase was not enough to compensate for the large drop in the sectors in January, suggesting that the growth in purchases of goods by consumers will keep soft in the first quarter.
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