Energy exports boost Q3 economic growth by 3.5%
Goods and services exports up 2.2% compared to a contraction of 3.9% in Q2.
OTTAWA — The Canadian economy slightly exceeded expectations in the third quarter as it grew at an annual pace of 3.5%, powered by exports, Statistics Canada said.
Strong numbers for energy exports helped the country’s real gross domestic product bounce back from a deep second-quarter contraction, which saw the economy recoil by a revised 1.3%, the Ottawa-based agency said.
The healthy rebound followed a second-quarter decline largely caused by oil-production shutdowns caused by Alberta wildfires and scheduled maintenance at oilsands facilities.
Statistics Canada said exports of energy products expanded 6.1% in the third quarter following a decline of 5.1% during the previous period.
Overall, exports of goods and services rose 2.2% in the third quarter compared to a contraction of 3.9% in the second quarter.
A consensus of economists had been expecting the numbers to show that the economy grew at an annualized rate of 3.4% in the third quarter, according to Thomson Reuters.
The key reading for GDP came ahead of the Bank of Canada’s scheduled announcement next week on its trend-setting interest rate, which is widely expected to stay at its low level of 0.5%.
In its October monetary policy report, the central bank predicted 3.2% growth for the third quarter and 1.5% for the final three-month period of 2016.
Economists will scrutinize the numbers for signs that economic momentum will carry into the final three months of the year.
In September – the final month of the third quarter – the economy expanded at a non-annualized rate of 0.3%. Economists had been predicting September GDP to rise 0.1%.
That hand-off followed growth of 0.2% in August and 0.5% in July.
The report also found that business investment in machinery and equipment contracted 3.2% in the third quarter, following a gain of 1% in the second quarter.
Business investment in residential structures decreased 1.4% in the third quarter after nine straight quarters of growth. Statistics Canada said most of the decline was due to a 5.7% drop in ownership transfer costs, which point to movement in the resale market.
The lower transfer costs followed BC’s introduction of a new tax on home purchases by non-residents, the report noted.News from © Canadian Press Enterprises Inc. 2016