Canada’s economy extended its streak of monthly gains, with preliminary data showing the expansion shot past expectations for the first quarter, cementing the Bank of Canada’s aggressive path for rate hikes.
Gross domestic product rose for a 10th straight time in March, increasing 0.5 per cent, Statistics Canada reported Friday. In February, the economy expanded a faster-than-expected 1.1 per cent, the agency said.
The preliminary data suggest first-quarter growth of about 5.6 per cent on annualized basis, which would beat most forecasts.
The report illustrates the surprising resilience of the Canadian economy despite COVID-19 restrictions meant to contain the spread of the omicron variant, and the quick rebound as authorities eased the lockdowns in February and March.
The economy is on track to grow by almost double the Bank of Canada’s latest projections for the first quarter, which it forecast at 3 per cent annualized just two weeks ago. Central bank officials estimate the country was already at full capacity at the end of last year, after the economy grew at a strong annualized 6.7 per cent pace in the fourth quarter.
Friday’s report will stoke expectations for more aggressive Bank of Canada interest rate hikes in coming months. The Canadian dollar was little changed, maintaining gains of 0.5 per cent on the day to $1.274 per U.S. dollar at 8:45 a.m. in Toronto trading.
Investors in overnight swaps are fully pricing in a 50-basis-point increase at the next policy decision on June 1, followed by a series of additional hikes that will take the benchmark interest rate to as high as 3 per cent by the end of this year. Since the start of March, the Bank of Canada has raised the overnight rate to 1 per cent from the emergency low of 0.25 per cent set when COVID-19 hit North America.
“The Bank of Canada has set the table for a 50bp hike in June, but data like this will have markets pricing in at least some chance that central bankers need to move more aggressively,” Royce Mendes, head of macro strategy at Desjardins Securities Inc., said in a report to investors.
The numbers also confirm expectations Canada’s expansion will outpace growth in many advanced economies this year, in part because the country won’t be negatively impacted by the Ukraine crisis thanks to the nation’s commodities sector. The U.S. economy shrank in the first quarter, according to preliminary estimates form the Commerce Department on Thursday.
In Canada, February’s gain was the fastest since March 2021, also a post-lockdown month. The increased activity was widespread, with services-related sectors up 0.9 per cent and goods producers gaining 1.5 per cent. Of the 20 sectors tracked by Statistics Canada, 16 posted increases. Accommodation and food recorded a 15 per cent expansion, as authorities lifted restrictions.
For its March preliminary estimate, the agency said client-facing industries led growth, with manufacturing and construction also expanding.
TORONTO – Restaurant Brands International Inc. reported net income of US$357 million for its third quarter, down from US$364 million in the same quarter last year.
The company, which keeps its books in U.S. dollars, says its profit amounted to 79 cents US per diluted share for the quarter ended Sept. 30 compared with 79 cents US per diluted share a year earlier.
Revenue for the parent company of Tim Hortons, Burger King, Popeyes and Firehouse Subs, totalled US$2.29 billion, up from US$1.84 billion in the same quarter last year.
Consolidated comparable sales were up 0.3 per cent.
On an adjusted basis, Restaurant Brands says it earned 93 cents US per diluted share in its latest quarter, up from an adjusted profit of 90 cents US per diluted share a year earlier.
The average analyst estimate had been for a profit of 95 cents US per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
ST. JOHN’S, N.L. – Fortis Inc. reported a third-quarter profit of $420 million, up from $394 million in the same quarter last year.
The electric and gas utility says the profit amounted to 85 cents per share for the quarter ended Sept. 30, up from 81 cents per share a year earlier.
Fortis says the increase was driven by rate base growth across its utilities, and strong earnings in Arizona largely reflecting new customer rates at Tucson Electric Power.
Revenue in the quarter totalled $2.77 billion, up from $2.72 billion in the same quarter last year.
On an adjusted basis, Fortis says it earned 85 cents per share in its latest quarter, up from an adjusted profit of 84 cents per share in the third quarter of 2023.
The average analyst estimate had been for a profit of 82 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
TORONTO – Thomson Reuters reported its third-quarter profit fell compared with a year ago as its revenue rose eight per cent.
The company, which keeps its books in U.S. dollars, says it earned US$301 million or 67 cents US per diluted share for the quarter ended Sept. 30. The result compared with a profit of US$367 million or 80 cents US per diluted share in the same quarter a year earlier.
Revenue for the quarter totalled US$1.72 billion, up from US$1.59 billion a year earlier.
In its outlook, Thomson Reuters says it now expects organic revenue growth of 7.0 per cent for its full year, up from earlier expectations for growth of 6.5 per cent.
On an adjusted basis, Thomson Reuters says it earned 80 cents US per share in its latest quarter, down from an adjusted profit of 82 cents US per share in the same quarter last year.
The average analyst estimate had been for a profit of 76 cents US per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
