OTTAWA -- Canada's economic recovery stalled in April, ending eight months of solid growth and entering into what economists say will be a less robust phase.
Statistics Canada reported Wednesday that real gross domestic product was unchanged during the month, a steep drop from the previous month's 0.6 per cent acceleration.
Analysts cautioned against reading too much into the one data point, particularly following a strong month, but also acknowledged that the days of strong growth are likely over for some time.
"It's typical for the economy to have its brighter days when you have that initial liftoff after recession," said Avery Shenfeld, chief economist with CIBC World Markets.
"The market sense is that the fastest days of growth are behind us and it's worried, perhaps excessively, about how much of a deceleration we have coming."
The Canadian dollar slid about a quarter-cent but equities were slightly up after Tuesday's large sell-off.
Although the April performance was even worse than the consensus forecast for 0.2 per cent growth, investors had been expecting a weak number.
Bank of Montreal economist Benjamin Reitzes said one of the reasons for the flat result is that consumers likely pushed forward spring spending to March, when the weather was unseasonably warm and bright.
That was borne out by the numbers, which showed retail sales declining 1.7 per cent after an exceptional 1.9 per cent buying spree in March.
Still, the surprisingly weak result gives Bank of Canada governor Mark Carney one more caution to think about for his next interest-rate decision on July 20, along with European woes and the slowing U.S. economy.
"We won't be surprised to see them downgrade their forecast at least for the second quarter (and) it increases the chance they could pause in July," Reitzes said.
The central bank's current forecast for the second quarter is for a 3.8 per cent advance, still healthy but well below the 6.1 per cent spurt of the first quarter.
In April, almost all indicators showed clear signs of braking, according to Statistics Canada.
Manufacturing was down 0.3 per cent, its first decline since last August, as 11 of the 21 major groups retreated.
Mining and oil and gas extraction increased 0.5 per cent, well off the 2.6 per cent rise of March.
Wholesale trade advanced 0.6 per cent in April following a 1.4 per cent uptick the previous month. The utilities sector fell 0.7 per cent for a second month in a row as demand for electricity and households' consumption of natural gas declined. Construction was barely up at 0.1 per cent.
