By David Ljunggren
OTTAWA, June 30 (Reuters) - The Canadian economy grew by
just 0.1 percent in April from March, Statistics Canada said on
Thursday, paving the way for a sickly second quarter on the back
of the devastation caused by major wildfires in Alberta.
The advance - the first in three months - matched the
forecast in a Reuters poll of analysts.
The Bank of Canada, citing the damage the fires did to the
energy sector, said on June 15 that growth was likely to be flat
or slightly negative in the second quarter before an outsized
recovery took hold in the third quarter.
That forecast could now be in doubt, given the economic
fallout from Britain's stunning vote last week to leave the
European Union.
Derek Holt, head of capital markets economics at Scotiabank,
said the April data were the last positive numbers before the
effects of the fires and Brexit kick in.
"The second quarter in my opinion is tracking poorer than
perhaps the Bank of Canada is guiding before we even start to
get the worst of the wildfires effects coming in through the
rest of the quarter's data," he said.
Manufacturing output in April rose by 0.4 percent after two
consecutive monthly decreases, pushed higher by growth in
non-durable goods manufacturing.
The utilities and the public sectors also posted increases
but they were largely offset by a 7.3 percent decline in the
output of oil sands plants. This was largely the result of
maintenance shutdowns at upgrader facilities.
Underlining the effect of the fires that forced the
evacuation in May of Fort McMurray, Alberta, Statscan said
separately that producer prices that month increased by their
most in over a year as the blaze caused supply disruptions that
pushed up the cost of energy and petroleum products.
The Bank of Canada says the damage from the inferno will
take 1 to 1.25 percentage points off second quarter growth but
has yet to forecast the consequences of Brexit.
The central bank, which cut rates twice last year to counter
the effects of a slump in crude prices, will provided updated
economic forecasts at its next interest rate decision on July 13
and is widely expected to leave rates unchanged.
A Reuters poll of primary dealers after Brexit showed they
had pushed back their expectations of a rate rise to the first
quarter of 2018 from the last quarter of 2017.
Graphic - Canada monthly GDP, exports to the U.S. http://link.reuters.com/jev87s
Graphic - Canada economic dashboard http://graphics.thomsonreuters.com/15/sc-canada/index.html
Graphic - Canada producer prices http://link.reuters.com/cuj92t
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(With additional reporting by Fergal Smith in Toronto; Editing
by Frances Kerry)