Canada’s economy grew a modest 0.6% in this year’s third quarter after contracting 0.5% during the previous second quarter.
Statistics Canada said that the rise in real gross domestic product (GDP) was driven largely by a strengthening trade balance, as imports dropped and exports rose.
Enhanced government investments across the country also helped lift Canada’s economic growth in Q3 as business investment was flat.
On the flipside, declines in household spending and a slower accumulation of business inventory weighed on the Canadian economy between July and September of this year.
On a per capita basis, Canada’s GDP increased 0.5% in the third quarter, after falling 0.5% the previous quarter.
Imports of goods and services fell 2.2% in the third quarter, the largest drop in three years. However, exports of goods and services from Canada rose 0.2%.
The slight rise in exports followed a significant drop in the second quarter of 7.0%.
Businesses accumulated non-farm inventories at a slower pace in the third quarter relative to the second quarter, dragging down overall growth in Canada’s economy.
Statistics Canada noted that household final consumption fell 0.1% as decreased spending on passenger vehicles (-2.3%) was offset by increased expenditures on rent and financial services.
Spending by Canadians abroad fell 3.9% in Q3, reflecting fewer international trips taken by Canadian tourists.
On a positive note, the household savings rate across Canada increased 4.7% in the third quarter amid signs that the economy is slowing and the labour market is softening.
