Fri Aug 29, 2014 8:11am PST
Real gross domestic product grew by 0.8% in 2014’s second quarter – the biggest quarterly gain since Q3 of 2011 – Statistics Canada announced August 29.Expressed as an annualized rate, this represents real GDP growth of 3.1%. Though the Canadian economy lost traction at the start of the year, it more than steadied its legs in second quarter,” said Nick Exarhos of CIBC World Markets, who explained that the annualized advance was “a full four ticks above the street’s expectations.”
“And though a downwards revision to Q1 leaves overall growth roughly in line with prior estimates, the momentum going into the second half of the year means that the near-term growth outlook is looking a touch brighter than a few months ago.” The quarter’s growth resulted from increases in economic activity in almost all sectors, with the exception of non-profit institutions serving households. Increased outlays on goods, up 1.2%, resulted in a 0.9% jump in household spending. Investment in residential structures was up 2.9%.
Goods and services exports increased 4.2% over the quarter, after falling 0.2% in Q1.
“Note that the export strength in Q2 was mostly driven by big gains to the U.S. and a very strong rise to Europe, of all places,” said BMO chief economist Douglas Porter. “Governor Poloz will be gratified by the big gains southbound, but the strength in sales to Europe does not look sustainable, especially given the recent stutter in EU growth.” On a monthly basis, June saw real GDP growth of 0.3%.