Canadas economy is headed for slower growth during the second quarter compared with the first, economists said Friday after gross domestic product gained 0.1 per cent in April.
The latest figures released by Statistics Canada indicated April was the fourth month of GDP growth in a row, driven largely by service industries.
However, economists pointed out that Aprils gain, which fell in line with their expectations, was below increases of 0.2 per cent in March and 0.3 per cent in February.
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CIBC economist Emanuella Enenajor said the figures suggest the economys 2.5 per cent annualized growth rate during the first quarter isnt set for a replay during the quarter that ends June 30.
Statistics Canada said gains in wholesale and retail trade, finance and insurance, arts and entertainment and the transportation and warehousing sectors were partially offset by a decline in the public administration sector.
Meanwhile, a decline in mining, quarrying, and oil and gas extraction pushed goods production down by 0.3 per cent.
Aprils dro in mining/oil and gas extraction suggests that the rebound in resource sector production that propelled GDP growth in Q1 is no longer a tailwind for the economy, Enenajor said in a note.
There were also declines in construction, while manufacturing, utilities and the agriculture and forestry sectors posted gains, Statistics Canada said.
TD economist Francis Fong said temporary factors contributed to Aprils GDP growth.
For instance, a 3.4 per cent gain in the arts and recreation industry could be attributed to the extended NHL season, which had a delayed start in January because of a labour dispute.
The overall picture is reflective of a more restrained second quarter for the Canadian economy, Fong wrote in a commentary.
Domestic conditions remain moderate as households continue to curb their pace of debt growth. Meanwhile, the sequester in the U.S. (a series of automatic government spending cuts) is expected to temporarily weigh on economic growth south of the border this, in turn, will keep a lid on export growth in Q2.
TD is estimating the full second quarter will show 1.6 per cent growth on an annualized basis.
Statistics Canada will issue its second-quarter GDP report in late August.
