Economic growth data for December and also Q4 is due at 1330 GMT on 1 March 2019

A couple of bank previews:

RBC:

  • We forecast a 1.1% annualized increase in Q4 GDP, which should be the first of two-largely temporary-below-trend quarters for growth.
  • Household consumption should continue to grow at a slower pace (1.5%, adding 0.9pp) as higher interest rates weigh on the sector,
  • residential investment is expected to detract about 0.2pp, as home resales fell in the quarter. We see non-residential investment as little changed, with a decline in structures (from lower oil rig counts) offset by a gain in M&E investment.
  • Net trade is not anticipated to be meaningful in either direction, but there is uncertainty, as December merchandise trade data will not be released before the report (but will be reflected in the data).
  • Our forecast does not significantly differ from the BoC's 1.3% projection in the January MPR, though we do see a slight bias to downside risks with our own call.
  • For the monthly series, we expect GDP to be flat in December. Lower oil rig counts weighing on oil/gas and a reversal of the transport decline from the November postal strike should be the two main impacts in the month.

CIBC:

  • By most indications it was a rough end to the year for Canada's economy. Household spending posted a second consecutive quarter of only tepid growth, while the Bank of Canada's much anticipated rotation in demand toward exports also didn't show up in Q4. Inventories could add to the downbeat tone in the report, given the voluntary cuts in oil production that took place during the period.
  • The dreary news doesn't end there though, with the final month of the fourth quarter looking like it will provide a weak handoff for Q1 2019. Already released data on manufacturing, retailing and wholesaling suggest that the economy made no advance in December. Restraint in the oil patch adds a downside risk to the month.
  • Forecast Implications - Fortunately, the drag from oil production will only be temporary, and recent job gains suggest that there could be at least a partial rebound in store for household spending growth. Still, the weakness will leave the Bank of Canada on the sidelines for at least the first half of the year