The common refrain among practitioners of the so-called dismal science (i.e., economists) is that one month does not a trend make. However, we’ve been seeing stronger-than-expected economic data in a number of areas during the first quarter.

Indeed, Canadians have been showing extraordinary resilience despite the unusually harsh winter. To be sure, some of these data only partially offset the economy’s performance during a dismal December marked by a severe ice storm that hit Ontario and Quebec especially hard.

And expectations for first-quarter gross domestic product (GDP) growth remain relatively muted. The consensus among private-sector economists is for the economy to grow by a seasonally adjusted 1.6 percent quarter over quarter, a sharp deceleration from the fourth quarter’s relatively torrid 2.9 percent pace.

Even so, the economy is expected to gain increasing momentum in each subsequent quarter through early 2015. And the fact that areas of the economy have exceeded expectations during the first quarter could mean even greater strength in the months ahead.

In fact, economists are already starting to adjust their estimates for first-quarter growth upward based on January GDP. In the first month of the year, the economy expanded by 0.5 percent sequentially, beating the consensus forecast by a tenth of a percentage point and very nearly offsetting December’s matching decline. On a year-over-year basis, GDP increased by 2.5 percent.

Output from goods-producing industries rose 1.0 percent in January and was the main driver behind GDP growth. Manufacturing contributed the most to the rise in GDP, with production in the sector up by 2 percent, reversing a 1.9 percent decline in December.  

Resource-oriented investors will be pleased to hear that the mining sector was the next-largest contributor to GDP growth. Mining, quarrying and oil and gas extraction rose 1.2 percent in January, following a 0.7 percent decline in December. In particular, support activities for mining and oil and gas extraction, such as drilling and rigging, climbed 5.8 percent in January.

Rising Retail

Part of January’s GDP performance was underpinned by similarly strong retail sales, which grew 1.3 percent month over month, to CAD40.7 billion. Although this result wasn’t quite enough to offset December’s 1.9 percent decline, it still managed to best consensus projections by six-tenths of a percentage point.

According to Statistics Canada, gains were reported in seven of 11 subsectors, with sales at motor vehicle and parts dealers the key contributor to overall retail trade. Sales of new cars were a particular bright spot, rising 2.3 percent sequentially and 9.1 percent year over year, to CAD7.7 billion.

Over the trailing three-year period, sequential retail sales grew an average of 0.2 percent per month, while over the trailing-year period retail trade grew by an average of 0.3 percent per month.

Then in February, international merchandise trade improved enough that Canada produced its first trade surplus since September. The trade surplus, which came in at CAD290 million, was well ahead of the consensus forecast of CAD200 million.

However, the initial CAD177 million trade deficit reported for January was revised to a wider deficit of CAD337 million.

Canada’s merchandise exports grew 3.6 percent, to CAD42.3 billion, thanks to trade in motor vehicles and energy products, particularly with the US. Strong volume growth of 2.2 percent was a bigger factor in this result than the 1.4 percent rise in prices.

Exports to the US, which absorbs about three-quarters of Canada’s exports, rose 4.4 percent month over month, to CAD32.4 billion, and 11.8 percent year over year. Canada’s trade surplus with its neighbor to the south increased to CAD4.3 billion from CAD3.9 billion in January.

Over the trailing three-year period, Canada’s monthly trade balance has averaged a deficit of CAD500 million. Over the trailing six-month period, by contrast, the deficit has narrowed to an average of CAD332 million per month.

Canada’s Still Hiring

Finally, Canada’s March employment gains were among its strongest of the past year. The economy added 42,900 jobs last month, surpassing the consensus forecast of 25,000 new jobs. The unemployment rate ticked lower by a tenth of a point, to 6.9 percent, while the labor force participation rate held steady at 66.2 percent.

This time around, part-time employment grew faster than full-time employment, with the former rising by 30,100 new jobs, while the latter increased by 12,800 jobs. Part-time jobs are generally considered to be of lesser quality than full-time positions, given their lower pay and higher turnover.

While full-time jobs have been created at a slower pace in the nearer term than over medium-term periods, such as the trailing three-year period, employment gains in this area have shown modest growth in recent months. Over the trailing year, for instance, the economy added an average of 6,300 new full-time jobs per month, while over the past six months, full-time jobs have been created at a rate of 8,500 per month.

The public sector delivered the vast majority of employment growth last month, with a veritable hiring spree for 39,000 positions. Employment gains in both part-time and full-time jobs were driven by 15-to-24 year olds, again suggesting lesser quality due to the lower earnings of this young demographic.

Although GDP growth likely decelerated during the first quarter, the surprising strength of the Canadian economy presages greater momentum for the remainder of the year than previously forecast.

Bay Street Beat

With earnings season now past, ratings changes were relatively few this month, though there were still a handful of companies that had significant shifts in analyst sentiment.

Bird Construction Inc’s (TSX: BDT, OTC: BIRDF) mix of analyst sentiment has finally turned bullish again, with five “buys” and two “holds.” The consensus 12-month target price is CAD14.90, which suggests potential appreciation of 4.2 percent above the current share price.

Shortly after the company’s earnings report last month, Raymond James upped its rating to “outperform,” equivalent to a “buy,” from “market perform,” or “hold.” The brokerage also increased its 12-month target price to CAD16.00 from CAD12.00.

More recently, Dundee Securities Corp raised its rating to “buy” from “neutral,” or “hold,” after Bird reported in late March that it had been awarded $300 million in new contracts for civil and building construction projects. The analyst also bumped his 12-month target price to CAD15.00 from CAD13.00.

Brookfield Renewable Energy Partners LP (TSX: BEP-U, NYSE: BEP) suffered an erosion in analyst sentiment over the past month.

Canaccord Genuity Corp lowered its rating to “hold” from “ buy,” though it maintained its 12-month target price at CAD32.00.

RBC Capital Markets cut its rating to “sector perform,” which is equivalent to a “hold,” from “outperform,” or “buy.” But it maintained its 12-month target price at CAD32.00.

And EVA Dimensions downgraded the LP to “sell” from “underweight,” though from a sentiment standpoint both designations are treated as equivalent ratings.

The current mix of analyst sentiment now stands at six “buys,” five “holds,” and one “sell.” The consensus 12-month target price is CAD32.92, which suggests potential appreciation of 3.3 percent above the current share price.

Northern Property REIT (TSX: NPR-U, OTC: NPRUF) disappointed analysts last month, with fourth-quarter funds from operations (FFO) per unit, the relevant measure of a real estate investment trust’s (REIT) profits, falling short of the consensus forecast by 4.2 percent.

The mix of analyst sentiment had not changed as of the date of last month’s issue, but sometimes it takes a few days for analysts to digest an earnings report and adjust their models accordingly.

In this case, two analysts downgraded the REIT. Scotia Capital lowered its rating to “sector perform,” which is equivalent to a “hold,” from “sector outperform,” or “buy.” However, it maintained its 12-month target price at CAD31.75.

And Dundee Securities Corp cut its rating to “neutral,” or “hold,” from “buy.” It too maintained its 12-month target price, which currently stands at CAD29.50.

Northern Property REIT now has four “buys” and five “holds.” The 12-month target price is CAD31.07, which suggests potential appreciation of 12.2 percent above the current unit price.

National Bank Financial lowered Shaw Communications Inc’s (TSX: SJR/B, NYSE: SJR) rating to “underperform,” or “sell,” from “sector perform,” which is equivalent to a “hold.” However, the bank maintained its 12-month target price at CAD24.50.

CIBC World Markets cut its rating to “sector perform,” or “hold,” from “sector outperform,” which is equivalent to a “buy.” But it bumped its 12-month target price to CAD27.00 from CAD26.00.

The current mix of analyst sentiment now stands at three “buys,” 11 “holds,” and four “sells.” The consensus 12-month target price is CAD25.37, which is actually 2.4 percent lower than the current share price.

Newalta Corp (TSX: NAL, OTC: NWLTF) suffered a weakening in sentiment over the past month.

Mackie Research Capital Corp lowered its rating to “hold” from “buy,” though it maintained its 12-month target price at CAD21.00.

CIBC World Markets cut its rating to “sector perform,” equivalent to a “hold,” from “sector outperform,” or “buy.” However, the 12-month target price remained at CAD20.00.

And Scotia Capital downgraded the stock to “sector perform,” equivalent to a “hold,” from “sector outperform,” or “buy.” But it increased its 12-month target price to CAD22.00 from CAD20.00.

With six “buys,” three “holds,” and one “sell,” the mix of analyst sentiment is still bullish, though now with a strong neutral component. The consensus 12-month target price is CAD21.94, which suggests potential appreciation of 7.5 percent above the current share price.

In the listing below, the number of analyst “buy,” “hold” and “sell” ratings for each company are shown, followed by the average 12-month target price among the analysts for which we have access to such data.

Month-over-month variances in the number of analysts listed below for each stock are often due to those securities being on a brokerage’s restricted list for a brief period. A restricted list is a compliance measure that’s typically used during the period when the investment banking side of an analyst’s firm is involved in advising the company.

Conservative Holdings

• AltaGas Ltd (TSX: ALA, OTC: ATGFF)–4–3–1 (CAD45.14)
• Artis REIT (TSX: AX-U, OTC: ARESF)–6–3–0 (CAD17.04)
• Bank of Nova Scotia (TSX: BNS, NYSE: BNS)–9–8–1 (CAD68.96)
• Bird Construction Inc (TSX: BDT, OTC: BIRDF)–5–2–0 (CAD14.90)
• Brookfield Real Estate Services Inc (TSX: BRE, OTC: BREUF)–0–1–0 (CAD15.00)
• Brookfield Renewable Energy Partners LP (TSX: BEP-U, NYSE: BEP)–6–5–1 (CAD32.92)
• Canadian Apartment Properties REIT (TSX: CAR-U, OTC: CDPYF)–7–4–0 (CAD23.89)
• Cineplex Inc (TSX: CGX, OTC: CPXGF)–5–6–2 (CAD43.21)
• Davis + Henderson Corp (TSX: DH, OTC: DHIFF)–3–5–1 (CAD31.75)
• Dundee REIT (TSX: D-U, OTC: DRETF)–4–3–0 (CAD33.17)
• EnerCare Inc (TSX: ECI, OTC: CSUWF)–5–2–0 (CAD11.86)
• Innergex Renewable Energy Inc (TSX: INE, OTC: INGXF)–3–5–1 (CAD10.76)
• Keyera Corp (TSX: KEY, OTC: KEYUF)–4–6–0 (CAD70.78)
• Northern Property REIT (TSX: NPR-U, OTC: NPRUF)–4–5–0 (CAD31.07)
• Pembina Pipeline Corp (TSX: PPL, NYSE: PBA)–7–3–1 (CAD42.60)
• RioCan REIT (TSX: REI-U, OTC: RIOCF)–4–5–0 (CAD28.61)
• Shaw Communications Inc (TSX: SJR/B, NYSE: SJR)–3–11–4 (CAD25.37)
• Student Transportation Inc (TSX: STB, NSDQ: STB)–2–3–1 (CAD7.41)
• TransForce Inc (TSX: TFI, OTC: TFIFF)–5–6–0 (CAD25.60)

Aggressive Holdings

• Acadian Timber Corp (TSX: ADN, OTC: ACAZF)–0–1–1 (CAD12.50)
• Ag Growth International Inc (TSX: AFN, OTC: AGGZF)–7–3–1 (CAD50.22)
• ARC Resources Ltd (TSX: ARX, OTC: AETUF)–11–8–1 (CAD32.22)
• Chemtrade Logistics Income Fund (TSX: CHE-U, OTC: CGIFF)–1–4–1 (CAD22.25)
• Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF)–22–1–1 (CAD47.29)
• Enerplus Corp (TSX: ERF, NYSE: ERF)–14–4–0 (CAD24.13)
• Extendicare Inc (TSX: EXE, OTC: EXETF)–0–3–2 (CAD7.44)
• Lightstream Resources Ltd (TSX: LTS, OTC: LSTMF)–0–15–3 (CAD6.53)
• Magna International Inc (TSX: MG, NYSE: MGA)–12–8–1 (CAD111.70)
• Newalta Corp (TSX: NAL, OTC: NWLTF)–6–3–1 (CAD21.94)
• Noranda Income Fund (TSX: NIF-U, OTC: NNDIF)–1–0–0 (CAD7.00)
• Parkland Fuel Corp (TSX: PKI, OTC: PKIUF)–5–4–0 (CAD21.47)
• Peyto Exploration & Development Corp (TSX: PEY, OTC: PEYUF)–14–4–2 (CAD39.14)
• ShawCor Ltd (TSX: SCL, OTC: SAWLF)–4–2–0 (CAD53.40)
• Vermilion Energy Inc (TSX: VET, OTC: VEMTF)–14–5–1 (CAD71.39)
• Wajax Corp (TSX: WJX, OTC: WJXFF)–4–6–0 (CAD39.19)