April's manufacturing and wholesale reports on Monday, and retail sales on Friday, should support the Bank of Canada's and RBC's outlook that Canada's growth will resume in Q2 after Q1's contraction, said the bank.
Statistics Canada's advanced estimate is a 4.6% month-over-month rise in manufacturing sales and a 0.6% month-over-month increase in retail sales. Part of this reflects higher oil prices, noted the bank.
However, manufacturing sales volume would still be up nearly 3% after accounting for that, and there's little evidence so far that high gasoline prices are crowding out retail spending in other areas, stated RBC.
Wholesale sales -- excluding oil -- likely held onto strength in April after a larger 1.9% month-over-month nominal increase, or 1.7% real, in March.
Home resales in May should also point to further stabilization in housing markets, with some of the least affordable and most depressed larger cities -- like Toronto -- showing green shoots in early reports, pointed out the bank.
Overall, data should be broadly consistent with the preliminary estimate that real Canadian gross domestic product rose 0.4% month-over-month in April, according to RBC. However, these advance monthly production estimates have been highly volatile, prone to revisions and are less reliable than usual as a gauge for quarterly GDP growth.
Importantly, headline GDP and employment data also remain heavily influenced by large population swings, added the bank. Quarterly demographics estimates on Wednesday are expected to show a third consecutive decline in population in Q1 due to a rapidly shrinking pool of non-permanent residents.
That should leave recent softer GDP numbers still looking better on a per-capita basis.