Canada’s economy grew at a slower pace than expected in the first three months of the year, but the pace picked up from the last part of 2018 as household spending accelerated and analysts were looking ahead to the second quarter with March’s print.

Gross domestic product growth was an annual 0.4% in the period, ahead of the 0.3% pace from the final three months of 2018, Statistics Canada said. But that missed the consensus on Econoday for a 0.7% increase. On a quarterly basis, the economy grew 0.1% in the first three months of 2019, unchanged from the fourth quarter.

“The details of the report were better than the headline would suggest,” said Brian DePratto, senior economist with TD Economics. “Consumption led the way as household spending climbed 3.5%, with all major categories showing solid gains. Business investment performed well.”

The 3.5% reading on household final consumption expenditure compares with 1% in the fourth quarter of last year. Business gross fixed capital formation rose 3.6% in the first quarter against an 8% contraction in the final part of 2018, the statistics agency said.

Monthly data showed better momentum into the new quarter, analysts said, with the country’s gross domestic product rising 0.5% month-on-month in March to beat the 0.4% consensus on Econoday and the prior month’s 0.2% contraction.

“Any concern over the meek Q1 result, was countered by a nice pop in the monthly result for March,” said Douglas Porter, chief economist with BMO Capital Markets. “After next to no growth in the past two quarters, the strong March result puts Q2 on the path for a hearty rebound, reinforcing the BoC’s view that the softness was temporary.”

On Wednesday, the Bank of Canada opted to keep its benchmark lending on hold for the fifth straight time amid rising global trade tensions. But the regulator’s Governing Council said recent data has reinforced their view that the slowdown in late 2018 and early 2019 was “temporary” and is being followed by a second-quarter pickup.

“The robust 0.5% monthly climb in March, solid jobs and housing data already seen in April, and easing of curtailments on oil production all augur well for growth,” DePratto said.

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