The Canadian economy continued to struggle in Q1 as gross domestic product posted another decline, said CIBC after Friday's GDP data.
The 0.1% annualized drop was in stark contrast with the consensus for a rebound to 1.5%, noted the bank.
Increases in consumption and inventories were offset by a drop in business investment and government spending, as well as a subtraction from net trade as imports increased and exports fell, while residential investment was also down sharply.
This marks the fifth drop in business investment in a row, as trade uncertainty continues to weigh on activity, stated CIBC.
That left final domestic demand at 0.4% quarter-over-quarter annualized decline, down from 2.7% in the prior quarter, while the household saving rate eased off further to 3.5%, the lowest level in two years, which doesn't bode well for consumption in the coming quarter, added the bank.
Q2 got off to a better start, however, with the advance estimate suggesting a 0.4% month-over-month increase in GDP, pointed out CIBC.