Canada’s economy returned to growth in the year’s second quarter after contracting in the previous two quarters and sending the economy into a brief, shallow recession.
Statistics Canada said that real gross domestic product (GDP) increased 0.8% in the second quarter, led by higher exports and business capital investments.
On an annualized basis, Canada’s economy grew 3.3%, its fastest pace of growth in three years. It marked the first expansion of the Canadian economy in three quarters.
On a per capita basis Canada’s GDP increased 1% in the year’s second quarter as the country’s population declined for a third consecutive quarter.
The economic growth in Q2 was driven largely by exports, which rose 3.6% for the largest increase since the first quarter of 2023.
Canada’s exports were led by an increase in shipments of passenger cars and light trucks, as well as metals and energy products such as oil and natural gas.
Products imported into Canada rose 0.3% in the second quarter after increasing 3.1% the previous quarter.
Business capital investments increased as engineering structures rose 2.3%, following two consecutive quarters of declines.
Business investment was also given a boost by higher spending on machinery and equipment, which rose in the second quarter to its highest level since 2024.
Household spending across Canada rose 0.8% in Q2, led by increased spending on mutual funds, vehicles, and rent.
Compensation of employees rose 1.5% in the second quarter, led by higher wages in finance, real estate, and company management.
Lastly, Statistics Canada said that household savings reached 3.7% in Q2 as growth in disposable income (up 2.1%) outpaced nominal household spending (up 1.7%).
