Exports accelerate the Canadian economy

Higher exports of energy, aircraft and pharmaceuticals propelled the Canadian economy in the second quarter, Statistics Canada reported on Thursday.

The economy grew at an annualized rate of 2.9% between April 1 and June 30, after posting an annualized increase of 1.4% in the first three months of 2018, the federal agency said.

Economists expected annualized growth of 3% for the second quarter, according to forecasts by Thomson Reuters Eikon.

According to Statistics Canada, the strong acceleration in growth was mainly due to higher exports, which rose 2.9% in the quarter.

This is the highest growth rate for this category in four years, due in part to a 5.6% increase in exports of energy products.

Exports of goods rose 6.3% in the second quarter, fueled in particular by pharmaceuticals, while aircraft, parts and aircraft engine exports increased 13.4%.

Exports of services decreased by 0.2%.

More oil imported

Imports, meanwhile, rose 1.6%, more than their 1% growth in the first quarter. Statistics Canada attributed much of this growth to higher imports of refined petroleum products to offset the planned closure of four Canadian refineries in April and May.

Higher bills for households
Household spending also increased, rising 0.6% in the second quarter, compared with growth of 0.3% in the first three months of the year.

The increase was mainly due to higher utility bills, including water, electricity and natural gas, and households spending 0.8% more on services, including renovations.

Investment in housing rebounded in the second quarter, up 0.3% from the 2.7% decline recorded in the previous three months. However, property transfer and new construction costs have decreased.

Business capital investment was 0.4% higher, but it was the weakest pace of growth in this segment since the fourth quarter of 2016, largely due to slower machine purchases and equipment.

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