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

Stettler RCMP seek third suspect in residential break-in

RCMP responded to a call that a home owner observed a break in at their cabin at Rochon Sands

Rotary Club of Stettler continues to help build up the community

Members gather Mondays at noon at the United Church Hall for lunch meetings

PHOTOS: Local officials sign proclamation declaring Feb. 16th to 22nd as Kin Canada Week

On Feb. 20th, Kin Week was proclaimed in Stettler in honour of 100 years of Kin in Canada

The Augustana Choir is gearing up for a spring tour with stops in Castor and Bashaw

The Choir will be touring during their spring break to recruit students to the program and perform for various communities

VIDEO: Province’s top court sides with Alberta on federal carbon tax

Today’s decision is the first to side with a province against the federal government

Father and two children, from Southern Alberta, killed in fatal crash in B.C.

The single vehicle crash occured near Kamloops on Highway 5A

Teck CEO says Frontier withdrawal a result of tensions over climate, reconciliation

Don Lindsay speaks at mining conference, a day after announcing suspension of oilsands project

Harvey Weinstein found guilty of sex crimes in landmark #MeToo trial

The cases against the Hollywood mogul started the #MeToo movement

CRA puts focus on paper returns as tax-filing season opens

The federal tax collector expects to handle about two million paper returns this calendar year out of roughly 26 million filings

Teck withdraws application for Frontier mine, citing discourse over climate change

The Vancouver-based company said it will take a $1.13-billion writedown on the Frontier project in Alberta

Violent ends to past Indigenous protests haunt Trudeau government

Trudeau adopted a more assertive tone Friday, insisting the barricade must come down

Blockades remain in place as Wet’suwet’en hereditary chiefs returning to B.C.

Hereditary Chief Woos said they are ready to engage in nation-to-nation talks with the B.C.

Two goals by Ben King pushes Rebels over Tri-city

7-5 game a high-scoring, runaway according to Rebels forward Chris Douglas

Most Read