After a devastating year that saw economic output fall by about 5 percent, the best Canada can hope for in 1983 appears to be a period of transition that will clear the way for a stronger recovery in 1984.

"There are no really strong signs for 1983, only a few pluses and a lot of negatives," said Douglas Peters, senior vice president and chief economist at one of Canada's large financial institutions, the Toronto-Dominion Bank.

Looking ahead from 1982, which was the worst 12-month period since the Great Depression, many economists expect a modest recovery.

They predict Canada's gross national product, the measure of goods and services, will grow after inflation by one or possibly 2 percent in the coming year--which would be the first advance in GNP since mid-1981. The forecast of 3 percent real economic growth by the government of Prime Minister Pierre Trudeau is widely dismissed as another in a long series of overly optimistic forecasts from Ottawa.

Canada, with its 24 million people, continues to watch for evidence of recovery in the United States, destination of 70 percent of Canadian exports. Unless the American economy picks up, "it will be a very weak year in Canada," Peters said.

Indeed, among the few positive signs seen here is an improvement late in 1982 in the American housing industry. That trend has brightened the outlook for Canadian lumber sales, which have been hard hit by the slump in U.S. construction.

Another plus for Canadians is lower interest costs in their own country. Borrowing rates, kept high by a Trudeau government convinced that Canada must move in concert with President Reagan's restrictive economic policies, peaked above 20 percent in 1981, and the resulting contraction of the economy is still being felt.

Last year's interest rates here tracked U.S. rates downward to the 13 percent range, where they are expected to stay at least in the short term.

With borrowing costs easing, demand may revive in sectors, such as housing and durable goods, that are sensitive to interest rates. And businesses may start replenishing inventories.

Trudeau has managed to brake Canada's relentless inflation rate, although prices continue to rise faster here than in the United States. The consumer price index, which rose about 10.8 percent in 1982, is expected to subside to 7.5 percent for 1983.

This trend results partly from the Liberal government's much publicized effort to couple mandatory wage and price restraints for government workers with similar voluntary measures in the private sector. Trudeau has sought and received help from provincial governments in a drive to keep wages and price increases under 6 percent in 1982-83 and 5 percent in 1983-84.

Assessing Ottawa's relative success in curbing inflation, Peter Gusen, an economist with the Conference Board of Canada research organization, said, "The damage inflicted on other parts of the economy at least has had that payoff."

Otherwise the wide-ranging campaign undertaken last summer by Trudeau to revive the economy so far has had few positive results. Such pro-business gestures as rollbacks of unpopular tax measures and replacement of much criticized senior government ministers have failed to win over a business community profoundly alienated by the nationalistic energy and economic programs of the past two years.

Consumer spending, the main stepping stone to recovery, is expected to remain weak because of economic insecurity. This stems from an unemployment rate that shot up from 7 percent to the current 12.7 percent in only 18 months, with the loss of almost 600,000 jobs in the same period. The current rate is among the worst in the industrialized world and is expected to show little improvement in 1983.

Many of the country's key sectors--pulp and paper, lumber, metal mining and steel--are hurting badly from uncertain markets and increased international competition. Some improvements are underway, however, in the previously depressed automobile and oil and gas industries.

The Trudeau government has talked with leaders of Canada's 10 provincial governments about taking steps to stimulate economic growth. But only minor spending initiatives on housing and public works are expected.

Trudeau's options are constrained by the need to avoid rapid shifts in the value of the Canadian dollar, now in the range of 80 cents to the U.S. dollar, and Ottawa's own revenue shortfall, estimated at nearly $20 billion for fiscal 1982-83 .

Michael McCracken, president of Informetrica Ltd., an Ottawa-based forecasting firm, said Ottawa would like to increase government spending but has scant room to maneuver. "Can the government afford to hemorrhage the deficit more?" he asked.