UPDATE 1-Canada Q4 annualized growth slows to 0.3% as economic woes bite
(Adds details of release, background)
OTTAWA, Feb 28 (Reuters) - Canada’s economic growth slowed to an annualized rate of 0.3% in the fourth quarter, the worst performance in almost four years, thanks in part to strikes, bad weather and shutdowns, Statistics Canada said on Friday.
The increase matched both the forecast of analysts in a Reuters poll as well as the Bank of Canada’s prediction. Statscan also revised the third quarter annualized growth down to 1.1% from an initial 1.3%.
Statscan cited pipeline shutdowns, bad harvest conditions, an eight-day railway strike in Canada, the spillover effect of a U.S. auto workers’ strike and global trade tensions. The growth figure was the worst since a 2.0% drop in the second quarter of 2016, when fire ripped through an oil-producing region.
Household spending on services jumped by 0.8% over the third quarter while business investment in machinery and equipment fell by 3.6%, the third consecutive decline. Export volumes dropped by 1.3%.
The Bank of Canada’s next interest rate decision is on March 4 and market expectations of a cut have jumped as the economy faces challenges from rail blockades and a coronavirus outbreak. The central bank has left rates unchanged since October 2018.