Canada’s economic growth accelerates in second-quarter as exports climb

August 30, 2018

OTTAWA (Reuters) – Canada’s economy expanded in the second quarter at the fastest pace in one year as growth in exports and household spending picked up, data from Statistics Canada showed on Thursday.

Gross domestic product grew at an annualized rate of 2.9 percent in the second quarter of the year, short of economists’ expectations for 3.0 percent but ahead of the Bank of Canada’s estimate of 2.8 percent.

The central bank, which has raised interest rates four times since July 2017 but has worried that trade uncertainty will slow business investment, is due to make a decision on interest rates next week.

It was the fastest pace of growth since the same quarter last year. First-quarter growth was revised higher to 1.4 percent from 1.3 percent.

On a non-annualized basis, exports climbed 2.9 percent, helped by increases for energy products and consumer goods. It was the biggest advance for exports since the second quarter of 2014.

Household spending rose 0.6 percent after a more tepid 0.3 percent advance in the first quarter. It was led by a 0.8 percent rise in outlays on services.

Business investment rose 0.4 percent, which was the slowest pace since the fourth quarter of 2016.

Accumulation of inventories by businesses slowed to C$13.4 billion from C$16.0 billion in the prior quarter.

June’s GDP growth was flat as a result of reduced output in the oil and gas extraction sector, and lower activity in wholesale and retail trade.

Oil and gas extraction fell 1.0 percent, weighed by a drop in non-conventional oil extraction after a power outage at a production facility in late June.

(Reporting by Fergal Smith; Editing by Susan Thomas)

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August 30, 2018 at 06:15PM
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