- As expected, the economy grew a meagre 0.2 per cent in the last three months of the year, roughly on par with the previous quarter, Statistics Canada said today. Annualized growth between October and December was 0.6 per cent.
- In the last six months of 2012 the economy grew at the slowest pace since the financial crisis.
- For the year as a whole, the economy grew 1.8 per cent, down from 2.6 per cent in 2011 and below the Bank of Canada’s forecast of 1.9 per cent.
- Consumer spending was once again the main contributor to growth in the fourth quarter, advancing 0.7 per cent.
- Business investment, governments spending and a small uptick in net trade were also bright spots. The main drag on growth, on the other hand, came from a sharp drop in inventories.
- GDP shrunk 0.2 per cent in December, reflecting weakness in manufacturing and retail sales, despite the holiday season.
What the analysts say:
- After closing 2012 on a flat note, the economy should see a small bounce-back in the first three months of the year on the back of stronger U.S. demand for Canadian exports, writes TD Economics’s Jonathan Bendiner: “nothing jaw dropping, expect a sub +1.5% gain in Q1.” Growth should pick up speed in the latter half of the year, he adds, once a resolution of fiscal troubles in Washington will lift the uncertainty that’s currently weighing on U.S. consumers and businesses.
- Sustained household expenditures, which drove the highest growth in aggregate demand in over a year, was a surprise to to economists, who had expected Canadians to have reined in spending after a recent report showed disappointing retail sales in December, notes CIBC’s Emanuella Enenajor.