Factory employees work on Ford Crown Victoria vehicles on Thursday, September 8, 2011 at the Ford Assembly Plant in St. Thomas, Ont.The Canadian economy appears to be gathering steam, to the surprise of many, with better-than-expected growth rates in the first two months of the year that have many analysts revising their miserly forecasts for the year. THE CANADIAN PRESS/Dave Chidley

Economy surprises with 3.7% growth in second quarter, its strongest since 2017

Energy products grew 5.9 per cent after posting a three per cent decline in the first quarter

The economy blew past projections by expanding at an annualized pace of 3.7 per cent in the second quarter, giving Canada its strongest three-month stretch of growth in two years.

Statistics Canada’s reading for real gross domestic product showed an unexpectedly solid turnaround for an economy that was coming off its weakest back-to-back quarters of growth since 2015.

The economy rode a powerful, broad-based rebound in goods exports in the second quarter, the agency said Friday in a new report.

Energy products grew 5.9 per cent after posting a three per cent decline in the first quarter, while farm and fishing products expanded 15.2 per cent following a 8.4 per cent contraction and non-metallic minerals rose 19 per cent for their strongest quarter in almost three years.

Housing investment expanded 1.4 per cent following five-consecutive quarters of declines.

The headline GDP number was also supported by a one per cent drop in import volumes, compared with a 2.1 per cent increase in the first quarter.

READ MORE: Canada’s GDP grows 0.2 per cent in May as manufacturing rebounds: Statcan

The report showed business investment declined 4.3 per cent after a posting 3.4 per cent increase in the first three months of 2019, while household spending slowed to 0.1 per cent, down from 0.7 per cent growth in the previous quarter.

Overall, the second quarter gave Canada its fastest pace of growth since it posted 4.4 per cent in the second quarter of 2017.

Statistics Canada also revised its first-quarter growth number to 0.5 per cent, up slightly from the initial reading of 0.4 per cent.

On a month-to-month basis, the report said the economy expanded 0.2 per cent — Canada’s fourth-straight month of growth.

Experts had been predicting a more modest second-quarter rebound after a sudden deceleration in growth over the winter that nearly saw the economy grind to a halt. The slowdown at the turn of the year was caused in large part by a sharp decrease in oil prices.

Economists had expected growth at an annualized rate of three per cent for the second quarter, according to the financial markets data firm Refinitiv.

The Bank of Canada had predicted the weakness would be temporary and had projected a second-quarter turnaround of 2.3 per cent.

Encouraging numbers about the health of Canada’s domestic economy have been arriving as global economic conditions become more uncertain.

There has been mounting evidence of a slowing global economy — mostly a consequence of the deepening U.S.-China trade war.

The Bank of Canada will be forced to consider the external and trade-related risks next Wednesday when it delivers its latest interest-rate announcement.

The global environment has dimmed since the central bank’s most recent public comments in early July. At the time, it underlined the resilience of the domestic economy and appeared to be in no hurry to adjust its policy, even as other central banks were poised to lower rates to respond to the already darkening international outlook.

Andy Blatchford, The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Sources receives $70K from SurreyCares

Funds will help with warehouse space for food programs in Surrey, White Rock, Langley

Rooftop hatchlings ‘a nice addition’ to White Rock RCMP operations

Pair of seagull chicks hatched in ‘fenced playground’ on July 2

‘Justice for Mona’ rally planned for Surrey

Security camera footage shows Mona Wang being dragged, stepped on during RCMP wellness check at UBCO

COVID-19: ‘Contactless’ donation drive in Surrey to help women in need

Items needed for women in shelters, transition houses in the Lower Mainland

Wanted Burnaby man arrested in White Rock

34-year-old facing 15 charges, including sexual assault

B.C. sees 25 new COVID-19 cases, community exposure tracked

One death, outbreaks remain in two long-term care facilities

VIDEO: Vancouver Island cat missing 18 months reunited with family

Blue the cat found at Victoria museum 17 kilometres from home

VIDEO: Alberta man rescues baby eagle believed to be drowning in East Kootenay lake

Brett Bacon was boating on a lake in Windermere when he spotted the baby eagle struggling in the water

Police nab three impaired drivers in one night in Maple Ridge

Ridge Meadows RCMP served 80 impaired driving infractions in June

Conservationists raise concerns over state of care for grizzly cubs transferred to B.C. zoo

‘Let them be assessed now before their fate is sealed,’ urges B.C. conservationist Barb Murray

B.C.’s COVID-19 job recovery led by tourism, finance minister says

Okanagan a bright spot for in-province visitor economy

National Kitten Day aka the ‘purrfect’ day to foster a new friend

July 10 marks National Kitten Day, a special day to celebrate all things kittens

Lower Mainland YouTubers claim to be Kelowna display toilet ‘poopers’

RCMP can not speak to legitimacy of video, will be investigating

Haida matriarchs occupy ancient villages as fishing lodges reopen to visitors

‘Daughters of the rivers’ say occupation follows two fishing lodges reopening without Haida consent

Most Read

l -->