Canada’s gross domestic product grew for a second month in February led by gains at potash miners and factories, putting the economy on track for its fastest quarterly growth since 2011.
Output rose 0.3%, matching the revised January gain, to an annualized C$1.57 trillion ($1.55 trillion), Statistics Canada said today in Ottawa. The median forecast in a Bloomberg survey of 23 economists was for a 0.2% expansion.
The report suggests economic growth in the first quarter was faster than 2%, about the pace the central bank says output can rise before inflation pressures build up. That’s up from the 0.6% annualized pace set at the end of last year as exports and investment slumped.
“Finally there’s something to cheer about in the Canadian economy, with growth picking up in the first quarter, and in the cyclical industries where such a turn is more meaningful,” Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, said in a research note sent by e-mail.
In notes to investors, Derek Holt of Scotiabank said Canada is tracking growth of 2.3% in the first quarter, while Shenfeld has the economy on pace for 2% growth. Those would be the fastest quarterly rates since 2011.
The Bank of Canada projects potential output growth at about 2.1% this year.
Bank of Canada Governor Mark Carney predicted modest expansion this year, reducing his first-quarter forecast to 1.5% from 2.3% on April 17 because of weakness in government spending and investment.
Mining and quarrying jumped 6.4% in February on increased potash output, Statistics Canada said. The agency’s mining, quarrying and oil and gas category rose 2.2%, the fifth straight increase. Manufacturing rose 0.8% following January’s 0.6% increase.
Most other categories made small contributions to the change in gross domestic product in February. The output of real estate agents and brokers fell 0.8% on a decline in existing home sales, while arts and entertainment rose 3.3% as spending gained for a second month after the end of a National Hockey League labor dispute, according to the report.
The economy grew 1.7% in February from a year earlier.
Statistics Canada said in a separate report its index of raw-materials prices paid by manufacturers fell 1.7% in March led by crude oil. Economists in a Bloomberg survey had a median prediction of a 0.5% increase.
The industrial product price index, which measures what manufacturers receive for their goods, rose 0.1%, compared with a median forecast it would be little changed.