Weak Q3 exports drag on GDP growth, says Statistics Canada

OTTAWA—The Canadian economy expanded at an annualized rate of 1.7 per cent in the third quarter of 2017 as weaker exports applied downward pressure on growth.

Statistics Canada says the increase in real gross domestic product was driven by a one per cent expansion in household spending.

But it says exports fell on a quarter-over-quarter basis of 2.7 per cent, which included a 3.4 per cent decline in goods exports that followed three quarters of growth.

The statistical agency also made a downward revision to Canada’s real GDP growth for the second quarter—dropping it to an annualized rate of 4.3 per cent compared with its initial reading of 4.5 per cent.

Economists had expected growth in the third quarter to come in at an annualized rate of 1.6 per cent, according to Thomson Reuters.

The third-quarter number was a little weaker than the Bank of Canada’s October forecast, which predicted real GDP to ring in at 1.8 per cent. The central bank is projecting real GDP to expand by 2.5 per cent in the fourth quarter.

The latest GDP figure follows four-consecutive quarters of stronger growth—4.3 per cent, 2.2 per cent, 3.7 per cent and 4.3 per cent.

The third-quarter report also says investment in residential structures fell for a second-straight quarter—the first time since early 2013 that the category saw a decrease in two straight quarters.

The data found the compensation of employees increased 1.3 per cent in nominal terms for its strongest quarterly growth in three years.