Canada’s economy unexpectedly stalled in February as manufacturing and production in other goods producing sectors shrank during the month. The real estate sector, which expanded 0.5 percent, had its best one-month gain since 2015 as housing in Toronto soared.
Economists surveyed by Bloomberg predicted a 0.1 percent gain in February, after a 0.6 percent jump in January.
Canada’s housing sector, particularly in Toronto, has become both the main driver of growth and one of the biggest sources of uncertainty amid concern the gains aren’t sustainable.
Even with the stalled growth in February, Canada is still on pace to have a strong first quarter, with annualized growth estimated to be just below 4 percent. That would likely be the fastest in the Group of Seven.
At the same time, caution prevails. At a rate decision two weeks ago in Ottawa, Canada’s central bank revised up growth projections for 2017, but cut them for 2018 and raised questions about the sustainability of the rebound and the country’s long-term growth outlook.
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