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February Canadian GDP negative

After the blistering pace of GDP growth on Q4/2010 (4.5%), the sudden drop in activity is somewhat worrying (-0.2%).  Then again, Canada, an export nation is dependent on its southern neighbors for nearly 70% of its exports, and as yesterday’s U.S. figures show that the economy is slowing south of the border.

(Source: StatsCan)

Moreover, the strength of the Canadian dollar is almost certain to have impacted the terms of trade and new order flows.  Interestingly the Canadian real estate sector continues to grow, and expectations of this trend to continue for some time (maybe until he end of Q2/2011).  

 (Source: StatsCan)

The net contributors to GDP for February were retail, services and construction whereas manufacturing was a real drag on GDP for February (-1.6%), it had been positive to the tune of 2.5% in January.  The biggest drag in the manufacturing -7.5% was vehicles and spare parts… once again the North American picture is painted south of the border.

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