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February 28, 2020CANADIAN ECONOMIC ACCOUNTS Q4 2019
Real gross domestic product (GDP) growth slowed to 0.3 per cent (all figures seasonally adjusted at annual rates) in Canada in the fourth quarter, following growth of 3.4 per cent in the second quarter and 1.1 per cent in the third quarter of 2019. Final domestic demand was up 0.7 per cent in the fourth quarter with rising household consumption but lower business investment. International trade was weak in the quarter. Statistics Canada notes that several factors influenced Q4 GDP including pipeline shutdowns, unfavourable harvest conditions, rail transportation strikes, autoworker strikes in the US, global trade tensions and market uncertainty.
Household spending growth continued at strong pace with rising services (+3.4%) while goods consumption was nearly flat (+0.1%). Service increase occurred in imputed rents, paid rents, food and beverage services, air transport and telecommunication. Durable goods were flat with higher spending on trucks, vans, and SUVs offsetting declines in passenger cars and used motor vehicles. Government final consumption expenditures increased 1.3 per cent.
Housing investment slowed to 1.1 per cent in Q4 after stronger growth in the previous two quarters. New construction decelerated sharply as single-unit dwellings fell. Multiple-unit dwellings continued to grow led by apartment projects in Ontario. Ownership transfers costs were up with resale activities in British Columbia, Quebec, and Ontario. Renovation activity fell for the second quarter in a row.
Business investment in machinery and equipment (-13.5%) was down for third consecutive quarter, notably in aircraft and trucks and buses. Engineering construction and intellectual property products were down while non-residential building construction was up.
Export and import volumes continued to decline with exports(-5.7%) falling for second consecutive quarter and imports (-2.5%) declining for a third consecutive quarter. Lower export volumes were reported in farm and fishing products, crude oil and bitumen, and passenger and light trucks. Imports declined in aircraft, cars and trucks, industrial machinery and equipment.
Inventories accumulation was up from $7.1 billion in Q3 to $10.5 billion in Q4 in part due to supply chain disruptions.
The terms-of-trade (ratio of price of exports to price of imports) was up with exports prices rising for crude oil and crude bitumen and imports prices declining. The overall GDP deflator was up 4.1 per cent on annualized basis.
Nominal GDP increased 4.5 per cent in Q4. Annualized compensation of employees rose 4.9 per cent. The household savings rate has risen from 1.3 per cent in Q3 2018 to 3.0 per cent in Q4 2019. Net operating surplus of corporation rose 1.6 per cent after declining 19.3 per cent in Q3.
ANNUAL
Real GDP growth in Canada slowed to 1.6 per cent in 2019 compared to faster growth in the previous two years. Weakness in international trade and lower investment were the main factors for the slowdown.
Household consumption growth slowed to 1.6 per cent pace, slower than previous two years. Growth was slower for goods, particularly durable and semi-durables and services. Residential structures declined 0.6 per cent after a 1.6 per cent decline in 2018.
Business capital investment in non-residential structures was up 0.9 per cent with structures up but lower machinery and equipment, and intellectual property products
Export volume growth slowed from 3.1 per cent in 2018 to 1.2 per cent in 2019. Import volumes slowed from 2.6 per cent to 0.3 per cent.
Nominal GDP growth slowed form 3.9 per cent in 2018 to 3.6 per cent in2019. Compensation of employee rose 4.4 per cent, outpacing nominal household spending 3.3 per cent increase and lifting the household savings rate to 2.7 per cent in 2019.
Source: Statistics Canada Tables 36-10-0103-01 and 36-10-0104-01
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