Canadian Retail Sales Up 0.8% to $69.8 Billion in March
Canadian retail sales grew by 0.8% in March from February, exceeding analysts’ expectations and is expected to increase by 0.5% in April. The largest increase was 4.8% by motor-vehicle and parts dealers, the first rise in three months.
Analysts suggested that consumers were rushing to buy cars before U.S. tariffs took effect in April.
In March, sales were up in six of nine sub-sectors, representing 58.9% of retail trade. In volume terms, retail sales increased by 0.9%. Bank of Canada Governor Tiff Macklem expects second-quarter growth to be weaker than the first quarter and could worsen in subsequent quarters if tariff uncertainty persists.
Currency swap market bets show odds of a 25-basis-point rate cut in June at 32%. The central bank last month forecast annualized first-quarter GDP to be 1.8%, but did not provide any other projections due to tariff uncertainty. Statistics Canada is due to issue first-quarter GDP data on May 30.
Source: Globe and Mail
Source: The Star
Source: Financial Post
Source: Statistics Canada
Canada’s First Quarter GDP Expands by 2.2% Annualized Rate, Beating Estimates
Canada’s economic growth in the first quarter was driven by a rush to get ahead of its looming tariff dispute with the United States. Real gross domestic product rose 2.2% annualized in the three-month period, up from 2.1% in the fourth quarter. The first quarter figures topped Statistics Canada’s flash estimate for annualized growth of 1.5% and beat calls for 1.7% from a Reuters poll of economists.
Threats of tariffs from the United States suffused the first quarter for Canada’s economy, particularly for the trade-sensitive automotive industry and steel and aluminum sectors. Import taxes and Canada’s retaliatory tariffs were initially applied in early March, though each have since faced various adjustments and exemptions.
Statistics Canada said fears around the looming trade war inspired both Canadian importers and exporters to rush to get ahead of tariffs. Goods exports were up 1.6% in the first quarter, driven by increased shipments of passenger vehicles and industrial machinery and parts. Non-farm businesses were also building up their inventories, reversing withdrawals from the previous quarter and pushing GDP higher.
Hampering growth was the uptick in imports and a slowdown in housing resale activity. Ownership transfer costs, which represent resales, were down 18.6% quarterly, the largest drop in roughly three years. Rates of household spending and saving were both slowing meanwhile in the first quarter amid weaker income gains.
BMO chief economist Doug Porter noted that despite the strong headline figures, the details of the first-quarter GDP print are less rosy on closer examination. The central bank tends to keep its policy rate elevated when it’s worried about inflation resurging and lowers it when the economy needs a boost, but both are at risk amid the United States’ upending of global trade.
Source: Globe and Mail
Source: The Star
Source: Financial Post
Source: Statistics Canada
Reducing Internal Trade Barriers Is a Top Priority for Businesses, KPMG Poll Shows
A KPMG poll of 250 Canadian business leaders has revealed that nearly two-thirds of them believe the government should work to reduce internal trade barriers to improve productivity.
The survey, conducted between May 9 and May 20, found that 64% of business leaders believe that removing interprovincial trade barriers and harmonizing regulations and credentials is a top priority for the government. 82% of business leaders believe that eliminating these barriers will improve their company’s efficiency and productivity.
Other top priorities identified by business leaders include a comprehensive tax review to improve competitiveness at 58%, and a government streamlining of processes and expediting resource and infrastructure projects at 56%.
Source: Globe and Mail
Source: The Star
