Canada is exposed to a weak consumer (high consumer debt), a weakening residential construction sector (and attendant financial sector risks), fiscal constraints and a dependency on weakening global growth.
GDP grew by some 2.5% in Q1 2013, the fastest pace since Q3 2011. Much of this was due to a rebound in energy exports following on from disruptions in 2012. Other important contributions came from government expenditure and a small rise in inventories, but the overall picture is one of slowing growth:
Household final consumption expenditure is slowing down and its growth rate, barring the 2008/2009 period, is the slowest since the early 1990s – the following shows quarterly growth rates and annual average geometric growth rates for rolling 3 year periods.
Government expenditure growth is also slowing down (note the average annual growth rate over the last 3 years), although it impacted GDP positively in Q1.
Investment is also slowing and fell in Q1:
As did the key machinery and equipment component:
Residential construction is now detracting from growth and may well continue to do so for some time, given the high overall activity in the sector:
Exports have led the way in Q1: