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August 31, 2022CANADIAN ECONOMIC ACCOUNTS Q2 2022 
Canada’s Real Gross Domestic Product (GDP) increased 3.3% (all figures seasonally adjusted at annual rates) in the second quarter of 2022. This was the fourth consecutive quarter of rising real GDP. Compared to pre-pandemic Q4 2019, the Canadian economy was 1.7% larger in Q2 2022.
Accumulation of inventory was the biggest contributor to growth in the last quarter. Statistics Canada notes that growth in the quarter was also supported by non-residential investment, exports and household consumption. Imports were up while residential and government investments were down.
Household consumption growth accelerated to 9.7% in Q2. Semi-durable goods and services accounted for much of the increase. Notably, increased travel and returning to office work led to increased purchases of clothing and footwear.
Residential investment contracted sharply, falling at a seasonally adjusted annualized rate of 27.6% as renovation activity slowed amid rising interest rates. Government investment also contracted, falling by 7.9%.
Expenditures on oil and gas facilities in British Columbia (LNG) and Alberta kept investment in engineering structures rising in Q2. Furthermore, renewed travel demand prompted new investment in aircraft, trucks, buses and other motor vehicles. This was the fifth consecutive quarterly increase in business investment for non-residential structures and machinery and equipment.
Imports increased by a seasonally adjusted annualized rate of 30.5% in Q2 because of travel services, motor vehicles (notably: electric and hybrid models) and capital equipment for wind farms in Alberta.
Exports grew by 10.9% on rising metals and travel services.
Inventory accumulation shot up to $46.2 billion. This accumulation of inventory was the largest contributor to real GDP growth in Q2. Statistics Canada reported the largest rise in farm inventories since quarterly data started in 1961 (notably: wheat, canola and other crops that benefitted from more favourable weather conditions).
The terms-of-trade (ratio of price of exports to price of imports) increased in Q2 driven by higher crude oil prices.
The overall GDP deflator (reflects overall price of domestically produced goods and services) was up 14.0% on annualized basis with the higher energy prices.
Nominal GDP increased at a seasonally adjusted annualized rate of 17.9% in Q2, the fourth consecutive quarter of accelerating nominal GDP growth.
Employee compensation (measured in current prices, not real volumes) was up by a seasonally adjusted annualized rate of 8.0% in Q2. Statistics Canada noted that growth in Atlantic Canada was considerably faster than the national average, with gains in Nova Scotia driven by rising wages in professional and personal services industries.
Higher revenues for energy companies lifted net operating surplus of corporations, offsetting slowing surplus for financial corporations because of insurance-related losses for storms in Ontario and Quebec.
Household disposable income was up at a seasonally adjusted annualized rate of 3.9%. With faster growth in nominal household consumption expenditures (+18.3% in seasonally adjusted annualized nominal terms), the household savings rate declined to 6.2% of disposable income in Q2.
Source: Statistics Canada. Gross domestic product, income and expenditure, second quarter 2020, Table 36-10-0103-01 Gross domestic product, income-based, quarterly (x 1,000,000), Table 36-10-0104-01 Gross domestic product, expenditure-based, Canada, quarterly (x 1,000,000), Table 36-10-0111-01 Current and capital accounts - National, Canada, quarterly
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