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Economic growth in Canada outpaces the U.S.

By The IJ Staff | November 05 2019 10:32AM

Statistics Canada released new research this week, entitled Recent Developments in the Canadian Economy: Fall 2019, wherein it summarizes recent developments in the Canadian economy, and highlights changes that occurred in the country’s economic data during the first eight months 2019.

The report found that economic growth in Canada outpaced the growth in the United States for the first time in two years. Economic output strengthened in the second quarter of 2019, as exports advanced, but final domestic demand was lower as household spending slowed and non-residential business investment declined. All told, real GDP growth rose 0.9 per cent during the second quarter, following a 0.1 per cent gain in the first, as declines in mining, oil and gas extraction and construction offset broad-based gains made by service providers.

Lower business investment

Domestic demand, including consumption and investment, edged down 0.2 per cent in the second quarter, the second decline in the last three quarters. Lower business investment has weighed on economic growth as business investment has generally trended lower since mid-2018. Investment in housing rose 1.4 per cent in the second quarter following five quarterly declines.

Household spending edged up 0.1 per cent during the second quarter of 2019, the slowest pace of quarterly growth in seven years. Higher spending on services, led by insurance and financial services, were largely offset by lower spending on durable and non-durable goods. 

Excluding gas prices, consumer prices rose 2.4 per cent on a year-over-year basis in July, August and September. The value of household real estate assets rose in the first and second quarters following declines in the second half of last year, and household net worth rose 1.2 per cent in the second quarter, following a 2.7 gain in the first, as equity markets rebounded from sharp losses suffered in late 2018.

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