By GREG QUINN
Canadas gross domestic product grew less than
economists forecast in April as production of goods such as
energy fell while service industries including wholesaling
Output rose 0.1% to an annualized C$1.62 trillion ($1.51
trillion), the same pace as in March, Statistics Canada said
Tuesday in Ottawa. The median forecast in a
Bloomberg economist survey was for the worlds
11th largest economy to expand 0.2%.
The first report on growth for the second quarter signals a
modest rebound from the January to March period, when the expansion
slowed to a 1.2%
annualized pace as a harsh winter disrupted production.
Economists predict Bank of Canada Governor Stephen Poloz will
keep his key lending rate at 1% at the July 16 decision to
aid an economy he said wont reach full capacity until
The economy has largely run out of excuses for
slow growth, said Doug Porter, chief economist at BMO Capital
Markets in Toronto. The figure today re-enforces the
broader picture that the economy isnt picking up
smartly in the spring as some had hoped.
The report showed a split between a 0.3% gain for service
industries and a similar decline for goods production, with
every major component of that category except for
manufacturing shrinking in April.
Canadas dollar weakened for the first time in four
days, depreciating 0.2% to C$1.0686 per US dollar. Government
bond yields fell, including the security due in five years,
to 1.54% from 1.56%.
Wholesale trade led the services increase with a 1.3% gain on
higher sales of machinery, equipment and supplies, Statistics
Canada said. Retailing gained 0.8%, led by automobiles, food
and clothing. The output of real estate agents increased 3%,
the third straight gain.
Mining, quarrying and oil and gas production declined 0.6% in
April, the first drop in four months, in part because of oil
fell by 0.6% and the
output of utilities companies fell 1% on reduced electricity
The economy grew 2.1% in April from a year earlier, the same
pace as in March.
The Bank of Canada predicted in April that gross domestic
product would grow at a 2.5% pace in the second quarter.
Economists surveyed by Bloomberg through last week
forecast a 2.2% increase.
There is very little growth in the industry, Tim
Hortons CEO Marc Caira said in a June 26 interview in Ottawa.
In this environment
difficult to raise prices.
Canadas largest coffee chain is seeking to boost
revenue by offering more combination meals that increase how
much customers spend at each visit, he said.