OTTAWA – Canada’s economic growth was stronger than expected in the third quarter, advancing at an annualized rate of 2.7 per cent, Statistics Canada reported Friday.
That was two-tenths of a point above estimates and more than a full percentage point above the weak second quarter, which Statistics Canada revised downward to 1.6 per cent from 1.7 per cent.
Analysts had been expecting the July-September quarter would strengthen from the lacklustre second quarter, which was affected by several unusual factors including a construction strike in Quebec, but estimates been generally for the growth rate to rise to 2.5 per cent.
CIBC World Markets economist Emanuella Enenajor says increased capital spending and inventories were a major factor in the third quarter’s improved growth rate.
“Digging in to the details, business capital spending ramped up, in part supported by re-starts to non-residential construction following the end of the Quebec construction strike (in the second quarter),” Enenajor wrote in a commentary.
She noted that inventories accounted for almost of half of the gains seen in the quarter, and that could offset growth in the current quarter that began in October.
Compared with the second quarter ended June 30, Canadian GDP was up 0.7 per cent in the three months ended Sept. 30, according to Statistics Canada — one-tenth of a point better than expected.
The federal government agency said Canadian exports fell 0.5 per cent in the third quarter, while imports were down 0.3 per cent.
The output of service industries expanded 0.6 per cent in the third quarter, while goods-producing industries rose 0.9 per cent.
Mining and oil and gas extraction were up 2.2 per cent in the quarter.
There were also gains in the manufacturing, retail and wholesale trade, finance and insurance sectors.
September’s growth from the previous month was 0.3 per cent, one-tenth of a point better than expected.
Following the announcement, Canada’s dollar was up 0.21 of a cent to 94.67 cents US.