Canadian economy grows 5.6% in first quarter, seen down 0.8% in April

FILE PHOTO: Workers make jackets at the Canada Goose factory in Toronto
FILE PHOTO: Workers make jackets at the Canada Goose factory in Toronto, Ontario, Canada, February 23, 2018. REUTERS/Mark Blinch/File Photo

June 1, 2021

OTTAWA (Reuters) -Canada’s economy grew 5.6% on an annualized basis in the first quarter, missing analysts’ expectations, and is expected to have contracted in April for the first time in a year as strict public health measures weigh, Statistics Canada data showed on Tuesday.

In a preliminary estimate, Statistics Canada said the economy would have contracted 0.8% in April. By contrast, the economy expanded 1.1% in March, the 11th consecutive monthly gain, as 18 of 20 sectors posted increases.

Analysts polled by Reuters had predicted an annualized gain of 6.7% in the first quarter, with the economy growing 1.0% in March from February.

Many Canadian provinces imposed business closures and stricter public health restrictions in April amid a third wave of COVID-19 infections. By April, economic activity was likely about 2% below pre-pandemic levels, Statscan said.

The Canadian dollar steadied at about near 1.2030 per U.S. dollar, or 83.13 U.S. cents, up 0.3% on the day.

(Reporting by Julie Gordon in Ottawa; Editing by Nick Macfie)