Canada’s gross domestic product grew for the 11th month in a row in March as the total value of all goods and services produced by the country expanded by 1.1 per cent from February’s level.
Statistics Canada reported Tuesday that 18 of the 20 parts of the economy it tracks grew during the month, with the exception of management and the utilities sector, which both shrank slightly from February’s level.
The housing market was a source of particular strength, with residential construction spending rising 7.6 per cent to $14 billion, while real estate agents and brokers raked in more than $19 billion, an all-time record.
Overall, the real estate sector contributed $254 billion to Canada’s economy during the month. That’s more than the $108 billion contributed by the manufacturing sector, and more than twice as much as oil and gas extraction, at just over $106 billion during the month, according to Statistics Canada.
Revenue at real estate brokerages rises to all time high
For the first quarter as a whole, the economy grew at an annual pace of 5.6 per cent. That’s worse than the 6.8 per cent that economists were forecasting, and less than the 9.3 per cent pace of growth that GDP was expanding at to finish off 2020.
April impacted by third-wave lockdowns
Despite the growth in March, Canada’s economic output is still about one per cent below what it was in February of 2020, before COVID-19.
And it looks like that gap got even wider in April, with the federal agency saying preliminary data for the month suggests the economy shrank by 0.8 per cent.
Retail trade, accommodation and food services look to have born the brunt of April’s decline, as new lockdowns to counter the third wave of COVID-19 hit those parts of the economy hard.
But even sectors like manufacturing and real estate seem to have contracted during the month.
“With many restrictions still in place through May, the economy probably did not do that much better in the second month of the second quarter,” TD Bank economist Sri Thanabalasingam said.
Ultimately, however, Thanabalasingam says he thinks the economy seems to be on track for solid growth later in the year.
“The good news is that the worst appears to be behind us. Vaccinations are progressing at an impressive pace, daily caseloads are declining and provinces are beginning to lift restrictions. These conditions will set the stage for a strong rebound in demand,” Thanabalasingam said.
“This could fuel extraordinary growth this summer.”