Real gross domestic product (GDP) in Canada grew 0.3 per cent in the third quarter of this year, following a 0.9 per cent increase in the second quarter, according to Statistics Canada.
The federal agency reported Friday that, expressed at an annualized rate, GDP advanced 1.3 per cent in Q3. GDP in the United States grew at 1.9 per cent.
“Third quarter growth was led by higher business investment and increased household spending, boosting final domestic demand by 0.8 per cent,” StatsCan reported.
Avery Shenfeld, an economist with CIBC Economics, said Canada’s third quarter was another so-so result, with this quarter’s growth rate also in line with the average pace we’ve seen in the past year or more.
“The 1.3 per cent annualized growth matched both consensus expectations and the Bank of Canada forecast, although it had some surprises in the composition. Consumer spending didn’t improve as much as we expected (up 1.4 per cent), but there were hefty gains in business capital spending and homebuilding to offset that, with inventory destocking and exports dropping to keep the headline in check,” he said in a commentary note.
“Final domestic demand was a hearty 3.2 per cent, which will for now reinforce the Bank of Canada’s view that they have rates low enough to offset the drag from weak external markets. Q3 didn’t end on a great note, with GDP only up 0.1 per cent on the month, matching the prior month, and leaving not much momentum heading into Q4. Overall, a mixed bag, but perhaps a bit better than it looks in the headline given the strength in domestic demand.”
Statistics Canada said business investment rose 2.6 per cent in the third quarter, the fastest pace since the fourth quarter of 2017.
Housing investment rose 3.2 per cent, the fastest pace since the first quarter of 2012. The increase was driven by both new home construction (+3.3 per cent)—mostly single-detached homes in Ontario—and higher ownership transfer costs (+8.7 per cent) from increased resale activities in British Columbia and Ontario, said the federal agency.