Gross domestic product (GDP) figures published by Statistics Canada for the third quarter of 2024 and for September 2024 show the financial and insurance industries growing slightly during those respective periods.
According to the Gross domestic product, income and expenditure, third quarter 2024 report, real GDP increased 0.3 per cent in the third quarter, after rising 0.5 per cent in the first two quarters of the year. On a per capita basis, GDP fell 0.4 per cent, the sixth consecutive quarterly decline, they say.
Increased spending
Household spending rose 0.9 per cent in the third quarter, led by increased spending on vehicles. Higher spending on financial services also contributed to the increase. Per capita household expenditures moved 0.2 per cent higher in the third quarter after falling in six of the last eight quarters.
Employee compensation, meanwhile, rose 1.7 per cent during the period, driven by wage growth in finance, real estate and company management and education services. Educational services figures were influenced by new collective bargaining agreements signed in Quebec and Ontario.
Against this backdrop, household savings rose, thanks to the fact that disposable income grew 2.3 per cent, double the rate of spending (1.2 per cent) in nominal terms. “The household saving rate reached a three-year peak of 7.1 per cent in the third quarter, up from 6.2 per cent in the second quarter. By comparison, the saving rate at the end of 2019 was below three per cent,” the report states. “The household saving rate is aggregated across all income brackets; in general, savings rates are greater in higher income brackets.”
Finance and insurance
In the monthly report, Gross domestic product by industry, September 2024, Statistics Canada says finance and insurance rose 2.1 per cent in the third quarter, the highest quarterly growth rate since the fourth quarter of 2021.
At the same time quarterly figures show, corporate income overall fell 1.1 per cent, after increasing 2.1 per cent in the previous quarter. Gross operating surplus for financial corporations – coming in at 0.9 per cent higher than in the previous period – grew despite the destructive weather negatively impacting the surplus of property and auto insurers. “Offsetting the lower surplus for property and auto insurance companies was higher income in the banking sector, where falling interest rates enabled higher spreads between loans and deposits,” says the report.
In September 2024 alone, meanwhile, Real GDP rose 0.1 per cent, unchanged over August’s figures. Statistics Canada says 11 of the 20 sectors it studies expanded in September, including the finance, insurance, real estate, rental and leasing sectors, which it groups together. The increase, it says, was largely driven by credit intermediation, thanks to increased mortgage and non-mortgage loan activity at chartered banks.
