Domestic Strength Cushions Trade Drag on Canadian Growth

This Week in Calgary CRE: Domestic Strength Cushions Trade Drag on Canadian Growth

Canadian GDP is expected to have grown 1.8% annualized in Q1, but momentum slowed sharply late in the quarter. A 0.4% gain in January masked February’s 0.2% contraction, driven by fading GST relief, harsh weather, and rising trade uncertainty. March likely posted a modest 0.1% rebound, thanks to recovering transportation and oil output—but business sentiment remains cautious.

Trade frictions and falling manufacturing output are weighing on investment. April posted the largest manufacturing job loss (-30,600) since the pandemic, and business investment is expected to soften further as companies delay spending amid policy turbulence. That said, core domestic demand remains stable. RBC cardholder data and StatsCan’s estimates both show retail spending rose 0.5% in April, following a 0.8% gain in March. Importantly, business confidence in current conditions is improving, even as forward outlooks remain subdued.

For Calgary CRE, the message is mixed. Retail and consumer-facing assets continue to benefit from resilient household spending, but industrial and flex space tied to export-driven sectors may face softer leasing demand in the months ahead. Expect developers and investors to watch Q2 GDP indicators closely for any sign that external weakness is seeping deeper into domestic fundamentals.

Reference: RBC Economics, Week Ahead Data Watch, May 24, 2025.

Connect with ClearView: Need help understanding how macro headwinds and sector strength could reshape Calgary’s CRE landscape? We’re here to help. Contact us at info@cvpartners.ca.

www.cvpartners.ca