Final domestic demand advanced 1.1% as spending on housing as well as consumer goods and services continued to grow. Real GDP increased 0.6% in March, a seventh consecutive monthly advance.
Production grew faster in the first quarter of 2010 than in the fourth quarter of 2009, and inventory levels rose after being drawn down in all four quarters of 2009.
Residential investment increased for a fourth consecutive quarter, as did consumer spending on goods and services. Export and import volumes both rose for a third consecutive quarter, with growth in imports outpacing growth in exports in the first quarter.
Expressed at an annualized rate, real GDP grew 6.1% in the first quarter after advancing 4.9% in the fourth quarter of 2009. This compared with a 3.0% first quarter rate of increase in the US economy.
The output of the goods-producing industries (+2.7%) increased for a second consecutive quarter, mainly on the strength of manufacturing and, to a lesser extent, construction and mining. In manufacturing, the gains were widespread, with durable and non-durable goods advancing 5.9% and 2.1% respectively. Services-producing industries (+1.1%) continued to rise, with wholesale and retail trade leading the way.
Consumers increased their spending on goods and services by 1.1% in the first quarter of 2010, following a 1.0% gain in the fourth quarter. Household spending on semi-durable goods advanced, particularly for clothing, footwear, and accessories. Expenditure on new motor vehicles grew, but at a much slower pace than in the previous three quarters. Spending on services was up 0.7%, after advancing 1.0% in the fourth quarter.
The growth in government current expenditure on goods and services slowed to 0.5%, following increases of 1.6% in the third quarter of 2009 and 1.7% in the fourth. After five quarters in which growth averaged over 4%, government capital expenditure advanced 1.1% in the first quarter.
Housing demand continues to advance
Investment in residential structures increased 5.4%, the fourth consecutive quarterly gain in this activity. New housing construction (+11%) pushed investment higher, while renovation activity was up 6.3%. February 1 was the deadline for expenditures to quality for the federal government's Home Renovation Tax Credit.
Ownership transfer costs related to housing resale activity declined for the first time since the fourth quarter of 2008. Transfer costs grew 57% over the last three quarters of 2009.
Nominal mortgage borrowing by households was up sharply in the first quarter, recording its fourth consecutive quarterly advance.
Investment in machinery and equipment rises
Business investment in plant and equipment grew 0.2%. Expenditure on machinery and equipment advanced 1.8%, but was, nonetheless, 23% below the peak attained in the first quarter of 2008. Investment in industrial machinery was a major contributor to the first quarter gain.
Business investment in non-residential structures fell 1.4%, the sixth consecutive quarterly contraction in this type of investment. Both building and engineering investment continued to decline, a trend that began in 2008.
Exports and imports up again
Exports of goods and services grew 2.9%, the third consecutive quarterly gain following five quarters of decline. Industrial goods and materials (+9.4%) as well as automotive products (+4.1%) had notable increases. Following six consecutive quarters of decline, exports of travel services rose 4.1%, partly as a result of the Vancouver 2010 Olympic and Paralympic Winter Games held in February and March.
Imports of goods and services were up 3.4%, following a similar rise in the fourth quarter. Imports of industrial goods and materials, automotive products as well as machinery and equipment were ...