The Canadian economy contracted on a monthly basis in January with real GDP edging down 0.1 per cent. The decline was the result of lower output in the energy extraction sector as well as lower real estate activity due to the implementation of new mortgage qualification rules. The output of real estate agents and brokers fell 12.8 per cent in January, the largest monthly decline since November 2008.
Given today's release, growth in the Canadian economy is tracking at about 1 per cent for the first quarter, a further slowdown from the already somewhat sluggish fourth quarter of 2017. Despite rising inflation, sharply slower economic growth should give the Bank of Canada pause about further increases in its overnight rate.
Copyright British Columbia Real Estate Association. Reprinted with permission.