Canadian second quarter and June growth readings

  • Q1 growth was +2.4% annualized (revised to 2.5%)
  • Year-over-year growth +1.1% vs +1.0% expected
  • Prior y/y growth was +1.0%

June GDP

  • June GDP +0.6% m/m vs +0.4% exp
  • May GDP was -0.6% m/m

Be careful with the headline here. The year-over-year number was better and there was some upward momentum in June, which may be seen as a good sign of growth carrying over into July and Q3.

Generally, there's enough good and bad to balance out here but it is still the worst quarter since the financial crisis. Some of that is the forest fire that hit in May but it's not a pretty picture.

In the first half of the year, the Canadian economy grew at just under a 0.5% annualized pace. That's poor, no doubt but it's already priced in. The BOC forecasts a +3.5% rebound in Q3.

Details of the report:

  • Business investment -0.5% in sixth consecutive quarterly drop
  • Exports -16.7% annualized in Q2
  • Imports +1.1% annualized in Q2

It wasn't just oil exports that weighed. Automotive and metals components also declined and consumer goods exports were at the lowest since 2003.