Canada Q2 GDP Growth Strongest in 2 Years


The Canadian economy advanced 0.9 percent on quarter in the three months to June 2019, easing from a 0.1 percent expansion in the previous period. It was the strongest growth rate since the second quarter of 2017, as exports rose while domestic demand declined. Expressed at an annualized rate, real GDP expanded 3.7 percent in the second quarter, faster than a 0.5 percent growth in the first three months of the year and beating market forecasts of 3 percent.

Exports increased 3.2 percent, boosted by sales of goods which rose 3.7 percent, following declines in the previous two quarters, namely energy products (5.9 percent), farm and fishing products (15.2 percent), non-metallic minerals (19 percent, the sharpest upturn since the third quarter of 2016), aircraft and related engines and parts (10 percent). Also, exports of services went up 1.1 percent, the same pace as in Q1, as exports of travel services (2.4 percent)

Import declined 1 percent, after a 2.1 percent gain  in the first three months of the year, mainly due to purchases of aircraft and associated engines and parts (-32.1 percent), pharmaceuticals and medicinal products (-3.9 percent) and communication and audio and video equipment (-6.7 percent). Meanwhile, imports of energy products rebounded 7.8 percent, following a 4.2 percent fall in prior period and purchases of motor vehicles and parts slowed to 1.4 percent. Additionally, imports of services dropped 1.8 percent, largely owing to a 4.0 percent decline in transportation services.

Household spending growth slowed to 0.1 percent from 0.7 percent in the first quarter. Outlays on durable goods fell 0.3 percent, largely as a result of a 1.4 percent decline in purchases of vehicles. Outlays on semi-durable goods eased to 0.3 percent; those on non-durable goods edged down 0.1 percent, after a 0.8 percent rise and those on services advanced 0.3 percent, easing from a 0.5 percent gain.

Following five consecutive quarterly contractions, housing investment went up 1.4 percent, as increases in multi-dwelling investments and conversions led the growth in new home construction (+0.9 percent). Higher resale activities boosted growth in ownership transfer costs (+3.8 percent), while renovation activities increased 0.7 percent.

Business investment fell 1.6 percent, mainly due to non-residential structures and machinery and equipment (-4.3 percent), of which machinery and equipment investment (-9.3 percent), in particular aircraft and other transportation equipment (-61.1 percent). On the other hand, investment in computers and related equipment rose 7.7 percent, rebounding from a 1.7 percent decrease. Growth in business investment in non-residential buildings slowed to 1.1 percent, while investment in engineering structures went down 1.0 percent, the sixth consecutive quarterly decline. Business investment in intellectual property products advanced 0.6 percent, recovering from a 1.3 percent fall.

Canada Q2 GDP Growth Strongest in 2 Years


Statistics Canada | Stefanie Moya | stefanie.moya@tradingeconomics.com
8/30/2019 1:22:12 PM