Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Stronger-than-expected growth in Canada’s economy in April added to evidence that a recent domestic slowdown is ending, dampening expectations for a Bank of Canada interest rate cut this year.

Canada’s economy grew by 0.3 per cent in April, Statistics Canada data indicated, faster than the 0.1-per-cent pace that analysts in a Reuters poll had predicted. It followed a 0.5-per-cent increase in March, notching the strongest two-month expansion since November and December 2017.

The data showed further easing in headwinds from the energy sector and the housing market that weighed on growth around the turn of the year, said Josh Nye, senior economist at Royal Bank of Canada.

Story continues below advertisement

“Those headwinds are starting to abate and it looks like growth is picking up to a stronger pace,” Mr. Nye said.

The Bank of Canada, which will release its quarterly business outlook survey at 10:30 a.m., has projected that the economy will expand at a 1.3-per-cent pace in the second quarter after barely growing in the fourth quarter of 2018 and the first quarter of this year.

“The Bank of Canada has been expecting that growth would pick up after a temporary slowdown but it does like it’s happened somewhat sooner than they were anticipating,” Mr. Nye said.

Mr. Nye expects growth in excess of 2 per cent in the second quarter.

Chances of an interest rate cut by the Bank of Canada this year fell to about 30 per cent from more than 40 per cent before the data, the overnight index swaps market indicated.

Money markets expect at least two rate cuts from the U.S. Federal Reserve over the same period.

The Canadian dollar touched its strongest since Nov. 7, last year at $1.3068 before giving up its gains.

Story continues below advertisement

Mining, quarrying and oil and gas extraction posted a 4.5-per-cent gain. Oil sands extraction jumped by 11 per cent as facilities in energy-rich Alberta scaled up production to take advantage of the government’s decision to ease production restrictions.

The manufacturing sector, however, contracted by 0.8 per cent, the largest decline since August 2017, in part because of a 7.7-per-cent drop in motor vehicle manufacturing as a result of temporary shutdowns at some plants and atypical production schedules.

Separate data from Statistics Canada showed that Canadian producer prices grew by 0.1 per cent in May from April on higher prices for energy and petroleum products, as well as autos and motor vehicle engines and parts.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Related topics

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies