WRAPUP 1-Strong Canada GDP data show recovery holding firm

* Canada recorded growth for sixth consecutive month

* Manufacturing, Olympics help drive economy

By David Ljunggren

OTTAWA, April 30 (BestGrowthStock) – Canada’s economy grew by a
healthy 0.3 percent in February, the sixth consecutive monthly
increase, in another sign the recovery from last year’s
recession is holding firm.

The figures show the economy is in line to meet the Bank of
Canada’s forecast for 5.7 percent annualized growth in the
first quarter of 2010. First quarter figures are due next
month.

“The initial stages of Canada’s recovery were simply much,
much more impressive than almost anyone expected,” said Douglas
Porter, deputy chief economist at BMO Capital Markets. The
increase matched analysts’ expectations.

Even the hard-hit manufacturing sector grew by 1.2 percent
on higher production of durables and nondurables, Statistics
Canada said on Friday.

Manufacturers have been particularly hurt by the crisis,
coupled with a strong Canadian dollar and weak U.S. markets.

“Overall, this was a fairly favorable report as it suggests
that the Canadian economy has continued to grow a respectable
pace,” said Millan Mulraine of TD Securities.

The news did little to influence the Canadian dollar. At
10:10 a.m. (1410 GMT), it (CAD=D4: ) was at C$1.0127 to the U.S.
dollar, or 98.75 U.S. cents, weaker than the C$1.0054 it
notched just before the release of the GDP data.

The Bank of Canada last week removed a conditional promise
to keep rates at record lows until the end of June. Virtually
all Canada’s primary dealers expect the central bank to
announce a 25 basis points rate hike on June 1.

“The economy appears to have strengthened further early
this year… Growth at this pace implies diminishing need for
the highly stimulative monetary conditions currently in place,”
said Paul Ferley of RBC Economics Research.

Statscan said the Winter Olympics, held in Vancouver in the
second half of February, helped performing arts and services
like hotels as well as radio and television broadcasting.

Oil and gas extraction fell by 1.8 percent, in part because
two fires at oil facilities have cut output since December.
Overall the mining sector grew by 0.4 percent.

BMO’s Porter said the growth rate was likely to moderate in
coming months as the housing market cooled and the stronger
Canadian dollar started to bite.

Separately, Statscan said industrial product prices dropped
by 0.4 percent in March from February, mainly as the Canadian
dollar strengthened against its U.S. counterpart. Raw materials
prices increased by 0.8 percent in the month.

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(Reporting by David Ljunggren; editing by Janet Guttsman)

WRAPUP 1-Strong Canada GDP data show recovery holding firm