Amid a recovering economy, the housing sector exhibited signs of resurgence after four straight months of decline.
In January, Canadian GDP saw its best gains in eight months, growing by 0.3% from December and outpacing an earlier prediction of 0.1% among economists surveyed by Bloomberg. On an annual basis, GDP expanded by 1.6%.
“Overall, a better than expected start to Q1 after a near zero growth rate in Q4, and reason enough for the Bank of Canada to hang on to its hopes that the growth stall late last year will prove temporary,” CIBC Capital Markets chief economist Avery Shenfeld wrote in an investor note, as quoted by BNN Bloomberg.
Statistics Canada said that January registered increases for 18 of 20 industrial sectors surveyed.
Real estate and brokerages blazed upward with 4.1% growth, although February might see some reversal of the trend, StatsCan stated.
Builders enjoyed a 1.9% performance increase in January, propelled by 3.1% growth in residential activity. This is the first gain that the construction sector had in eight months, as well as the largest in nearly 6 years.
In late March, Finance Minister Bill Morneau allayed fears that Canada is running headlong towards a recession – or worse, is already in one. This, after various observers warned that recent declines in housing-related activity will be harmful for the national economy in the long run.
“They would be incorrect,” Morneau said the morning after the release of the latest federal budget, as quoted by the Financial Post. “That would be technically wrong and certainly not in line with our expectations.”
Gluskin Sheff chief economist David Rosenberg earlier cautioned that “if we’re not in a recession yet, we’re just basically one notch away,” while Fidelity Investments portfolio manager and former BoC advisor David Wolf argued that Canada might be already knee-deep in one based on tepid Q4 2018 numbers.