Canadian Cool Down

Canadian Cool Down

Bricklin Dwyer - Market Economics
US Daily Spotlight | 09 May 2013 00:20 |

The housing market in Canada continues to be the most significant risk facing the economy. While the economy is closely tied to both US economic (mostly autos and housing) growth and global commodity prices, the Canadian consumer has been the driving force behind economic growth, making up over 54% of GDP. In spite of the lacklustre 0.7% q/q saar and 0.6% rates of GDP growth in Q3 and Q4 last year, personal consumption expenditures contributed 1.5pp to growth each quarter and kept the economy expanding. Despite this persistent strength in consumption, growth in disposable income and residential investment has slowed substantially – pointing to vulnerability in consumer demand.