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Canada’s fourth-quarter GDP at slowest pace since Q2 2016

March 04, 2019

Canada’s real gross domestic product edged up 0.1% in the fourth quarter, the slowest pace since the second quarter of 2016, Statistics Canada reported. Expressed at an annualized rate, real GDP edged up 0.4% in the fourth quarter.

For the full year, annual growth was 1.8% for 2018, down from a 3.0% increase in 2017; in comparison, real GDP in the US rose at an annualized rate of 2.9%. Growth in corporate earnings slowed considerably in 2018, as gross operating surplus grew 1.8% in nominal terms, following a 9.1% increase in 2017.

Real GDP in the fourth quarter slowed from an annualized rate of 2.0% in the third quarter and came in well below economist expectations for a 1% annualized increase, Bloomberg reported. While a slowdown was widely expected in the final months of the year due to falling oil prices, it’s a much bleaker picture than anyone anticipated, with weakness extending well beyond the energy sector.


The slowing of GDP in Canada in the fourth quarter mainly reflected a 2.7% drop in investment spending. Exports of goods and services also edged down 0.1%. These declines were largely offset by higher inventory accumulation, as businesses accumulated $12.5 billion of non-farm inventory following investment of $3.5 billion in the previous quarter. The economy-wide stock-to-sales ratio increased from 0.825 in the third quarter to 0.840 in the fourth quarter.


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