Canada: Some positive momentum heading into Q2 – HSBC

David Watt, Economist at HSBC, notes that the Canadian economy grew by 3.7% in Q1 and though this was below the consensus expectation, it still represented a solid quarter of economic growth.

Key Quotes

“Inventories, consumption, and housing investment were the main drivers of growth in the quarter, in part supported by households running down savings and increasing borrowing. Net trade made a negative 4.4 percentage point contribution to GDP growth, as exports remains weak. An upside surprise to March GDP indicates that the economy has some positive momentum into Q2, but we remain cautious as some of the strength in household spending and inventories looks temporary.”