Output in the the Canadian economy expanded 0.3 per cent in January, offsetting declines in the two previous months. The construction sector recorded positive growth for the first time in eight months, led by a 3.1 per cent increase in residential construction. The GDP of offices of real estate agents and brokers increased 4.1 per cent in January following four months of decline.
We expect the Canadian economy will expand just 1.5 per cent in 2019 as it struggles to rotate from consumption and residential investment led growth to an expansion driven by export and business investment. The latter will be a particularly difficult shift as the Alberta energy sector continues to face significant challenges. That means little chance of further rate tightening by the Bank of Canada in 2019 and therefore sustained lower mortgage rates this year.