August 29, 2014 9:05 am
Updated: August 29, 2014 9:09 am

Canadian economy grew by 3.1% in Q2

The economy soared in the second quarter, accelerating to an annualized pace of 3.1 per cent.

Jonathan Hayward/CP Photo

OTTAWA – Canadians shook off the harsh weather of last winter, spending the economy to an annual pace of 3.1 per cent in the second quarter of this year.

Statistics Canada says the sharp increase in the gross domestic product was the strongest growth rate in nearly three years and compared with a 4.2 per cent rise in GDP south of the border.

The jump came as the agency updated its result for the first quarter to an annual pace of 0.9 per cent compared with an earlier reading of 1.2 per cent in the first three months of the year.

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Economists had expected a growth rate in the second quarter of 2.7 per cent.

On a monthly basis, the Canadian economy grew in June by 0.3 per cent compared with economist expectations for growth of 0.2 per cent.

Statistics Canada said there was growth in every sector during the quarter, save for non-profit institutions serving households.

Consumers led the increase, with household consumption up by 0.9 per cent for the three month period ended June 30.

Canadians spent 1.2 per cent more on goods in the second quarter, and 0.7 per cent more on services.

Spending on housing showed a marked increase with investment in residential structures up 2.9 per cent by quarter and home ownership transfer costs up by a full 9.0 per cent after two previous quarters of decline.

Exports were also up by 4.2 per cent in the second quarter – the strongest performance since the third quarter of 2011 – after declining by 0.2 per cent in the first three months of the year.

Significant increases were seen in exports of vehicles, farm and fishing products, forestry products and packaging materials.

As well, business capital spending was up by 0.8 per cent after two consecutive quarterly declines.

However, businesses slowed spending in other areas, accumulating roughly $7.0 billion in inventories during the second quarter, down from $14.5 billion in the period from January through March.

Retailers reduced their inventories of non-durable goods by $2.8 billion.

Service industries increased output in the second quarter by 0.8 per cent, with notable increases seen in retail and wholesale trade, transportation and warehousing.

Spending by business on intellectual property products was down by 2.8 per cent, maintaining a trend from the previous month.

There were also declines in investment in mineral exploration, research and development, and software.

© The Canadian Press, 2014

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