OTTAWA – The pace of Canada’s economic growth picked up steam in the first quarter of this year, helped by continued household spending and a turnaround in business investment.
Canada’s real gross domestic product grew at an annualized rate of 3.7 per cent in the first three months of the year, Statistics Canada said Wednesday.
The growth was helped by a 2.9 per cent increase in business gross fixed capital formation, which had fallen in eight of the previous nine quarters.
Business investment in residential structures grew 3.7 per cent, boosted by new construction, the strong real estate market in Ontario and a gain in renovation activity.
Business investment in machinery and equipment gained 5.8 per cent, after moving lower in four of the previous five quarters.
Meanwhile, household final consumption gained 1.1 per cent in the quarter as spending on transport and in particular the purchase of vehicles led the way.
Despite the increase in the pace of growth in the first quarter, it was below expectations. Economists had estimated annualized growth of 3.9 per cent for the first three months of the year, according to Thomson Reuters.
However, growth in March was stronger than expected. GDP grew 0.5 per cent in March, compared with the estimate of 0.2 per cent for the final month of the first quarter.
The figures for March showed that goods-producing industries climbed 0.9 per cent, while service industries added 0.3 per cent.
Overall annualized growth figures for the second half of 2016 were also revised higher Wednesday as the figures for third and fourth quarters were increased to 4.2 per cent and 2.7 per cent, compared with earlier readings of 3.8 per cent and 2.6 per cent respectively.