The monthly reading for December GDP due at 1330 GMT on Friday 2 March 2018 from Canada
- expected 0.1% m/m, prior 0.4%
- expected 3.3% y/y, prior 3.5%
Also, quarterly GDP (annualised) for Q4:
- expected 2.0%
- prior 1.7%
Some snippets from a couple of local bank previews:
BMO:
- a torrid four quarter run (2016Q3-2017Q2) where growth averaged 3.6%, the strongest since 2010
- Consumer spending is expected to decelerate somewhat, but still clock in at a solid 2.3%, after averaging 4.2% in the first three quarters of 2017
- Business investment likely accelerated modestly, as imports of electrical equipment surged in the quarter
- Housing should benefit from a small increase in starts and a temporary jump in home sales ahead of the new mortgage rules.
- Government spending looks to be a positive as well, though not to the same extent as in the prior two quarters
- Net exports could subtract about 1 ppt from growth and imply some downside risk to our call
- December GDP is expected to be soft, with declines in manufacturing, wholesale and retail activity
- real estate activity should be a big positive
- puts monthly GDP ever so slightly higher at +0.1%, though just barely, as there's meaningful risk of a flat print.
CIBC:
- The back half of the year was clearly slower than the start, a reason we see less of a need for the Bank of Canada to tap on the brakes in the months ahead.
- Quarterly growth in Q4 will be unchanged from the third quarter's pace
- individual line items will still show some strength, particularly those tied to domestic demand
- strong pace of new housing starts
- one big drag will be tied to net trade, as imports rebounded smartly after a sluggish Q3, while exports failed to keep pace
- With slack basically gone in the Canadian economy, we're going to have to get used to a growth trend in the 1½-2% range.
- natural braking in the economy through higher debt loads, and challenges in meaningfully growing export volumes to obviate the need for an aggressive BoC from here on out. Expect a gentle hand from Poloz for the balance of the year, with only more hike likely sometime in the summer.
