Real gross domestic product (GDP) increased 1.2% in the fourth quarter, the largest quarterly increase since the third quarter of 2000.
Figures released this morning by Statistics Canada also show final domestic demand advanced 1.1% as consumer spending continued to grow. Real GDP increased 0.6% in December, a fourth consecutive monthly advance.
For a third consecutive quarter, growth in final domestic demand was led by increases in personal expenditures, government expenditures, and investment in residential structures. Export and import volumes both rose for a second consecutive quarter, with growth in exports outpacing that of imports in the fourth quarter.
Goods-producing industries rose 2.1% in the fourth quarter, the first quarterly gain since the second quarter of 2007. Production in mining and oil and gas extraction rebounded in the fourth quarter, while manufacturing and construction strengthened.
Service-producing industries advanced 0.8%, as wholesale trade and the activities of real estate agents and brokers continued to grow at a strong pace. The public sector (health, education and public administration combined) as well as the finance and insurance sector also increased.
Expressed at an annualized rate, real GDP grew 5.0% in the fourth quarter, up from 0.9% in the third quarter. This compared with a 5.9% fourth-quarter rate of increase in the U.S. economy.
The nation's number crunchers also said consumer spending on goods and services advanced 0.9% in the fourth quarter, the same as the increase recorded in the third quarter. Households increased their spending on durable goods (+2.6%), particularly for motor vehicles and household furniture and equipment. Spending on services grew 1.0%, after advancing 0.8% in the third quarter.
Investment in residential structures increased 6.5% in the fourth quarter, its third consecutive quarterly gain. Fourth-quarter investment was led by new housing construction (+7.1%), the first quarterly gain since 2007. Resale activity and renovations continued the upward trend that began in the second quarter.
Businesses reduced investment in plant and equipment (-2.3%), after an increase in the third quarter (+1.6%).
Investment in non-residential structures fell 2.2%, the same rate of decline as in the third quarter. It was the fifth consecutive quarterly contraction. Both building and engineering investment were on a downward trend throughout 2009.
Investment in machinery and equipment fell 2.4% after a 5.3% gain the previous quarter. All major categories of business machinery and equipment declined, except for telecommunications equipment, where investment rose 0.5%.
Exports of goods and services grew 3.7%, after a 2.9% increase in the third quarter. Most major export categories were up in the fourth quarter, notably automotive products (+13%), industrial goods and materials (+6.9%) and energy products (+5.7%).
The growth in imports of goods and services slowed to 2.2%, after advancing 8.0% in the third quarter. Imports of automotive products, "other consumer goods," industrial goods and materials, and services were all up, while imports of energy products and machinery and equipment declined.
Business inventories were drawn down for a fourth consecutive quarter, with manufacturers and motor vehicle dealerships leading the way. The economy-wide ratio of stock to sales edged down for a second consecutive quarter. Businesses held inventories equivalent to 68 days of sales, down from 70 days in the third quarter, but still higher than the decade's average of 63 days.
The price of goods and services produced in Canada advanced 1.1%, with significant price increases for residential structures, motor fuels, and energy exports. Prices fell in several categories, notably personal travel and industrial machinery. Final domestic demand prices were up 0.4%.
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