Factory employees work on Ford Crown Victoria vehicles on Thursday, September 8, 2011 at the Ford Assembly Plant in St. Thomas, Ont.The Canadian economy appears to be gathering steam, to the surprise of many, with better-than-expected growth rates in the first two months of the year that have many analysts revising their miserly forecasts for the year. THE CANADIAN PRESS/Dave Chidley

Factory employees work on Ford Crown Victoria vehicles on Thursday, September 8, 2011 at the Ford Assembly Plant in St. Thomas, Ont.The Canadian economy appears to be gathering steam, to the surprise of many, with better-than-expected growth rates in the first two months of the year that have many analysts revising their miserly forecasts for the year. THE CANADIAN PRESS/Dave Chidley

Economy surprises with 3.7% growth in second quarter, its strongest since 2017

Energy products grew 5.9 per cent after posting a three per cent decline in the first quarter

The economy blew past projections by expanding at an annualized pace of 3.7 per cent in the second quarter, giving Canada its strongest three-month stretch of growth in two years.

Statistics Canada’s reading for real gross domestic product showed an unexpectedly solid turnaround for an economy that was coming off its weakest back-to-back quarters of growth since 2015.

The economy rode a powerful, broad-based rebound in goods exports in the second quarter, the agency said Friday in a new report.

Energy products grew 5.9 per cent after posting a three per cent decline in the first quarter, while farm and fishing products expanded 15.2 per cent following a 8.4 per cent contraction and non-metallic minerals rose 19 per cent for their strongest quarter in almost three years.

Housing investment expanded 1.4 per cent following five-consecutive quarters of declines.

The headline GDP number was also supported by a one per cent drop in import volumes, compared with a 2.1 per cent increase in the first quarter.

READ MORE: Canada’s GDP grows 0.2 per cent in May as manufacturing rebounds: Statcan

The report showed business investment declined 4.3 per cent after a posting 3.4 per cent increase in the first three months of 2019, while household spending slowed to 0.1 per cent, down from 0.7 per cent growth in the previous quarter.

Overall, the second quarter gave Canada its fastest pace of growth since it posted 4.4 per cent in the second quarter of 2017.

Statistics Canada also revised its first-quarter growth number to 0.5 per cent, up slightly from the initial reading of 0.4 per cent.

On a month-to-month basis, the report said the economy expanded 0.2 per cent — Canada’s fourth-straight month of growth.

Experts had been predicting a more modest second-quarter rebound after a sudden deceleration in growth over the winter that nearly saw the economy grind to a halt. The slowdown at the turn of the year was caused in large part by a sharp decrease in oil prices.

Economists had expected growth at an annualized rate of three per cent for the second quarter, according to the financial markets data firm Refinitiv.

The Bank of Canada had predicted the weakness would be temporary and had projected a second-quarter turnaround of 2.3 per cent.

Encouraging numbers about the health of Canada’s domestic economy have been arriving as global economic conditions become more uncertain.

There has been mounting evidence of a slowing global economy — mostly a consequence of the deepening U.S.-China trade war.

The Bank of Canada will be forced to consider the external and trade-related risks next Wednesday when it delivers its latest interest-rate announcement.

The global environment has dimmed since the central bank’s most recent public comments in early July. At the time, it underlined the resilience of the domestic economy and appeared to be in no hurry to adjust its policy, even as other central banks were poised to lower rates to respond to the already darkening international outlook.

Andy Blatchford, The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Emergency crews used a backhoe loader to clear fire debris from the scene of a fire on Wesley Street Thursday as police and firefighters gathered up propane tanks, stoves and fireplaces used by camp residents to heat tents. (Chris Bush/News Bulletin)
UPDATE: City dismantling Wesley Street homeless encampment after fire

Fire broke out at about 12:15 p.m. Thursday, Dec. 3

Nanaimo Ladysmith Public Schools’ staff and trustees held their annual general board meeting Dec. 2 via Microsoft Teams. (SD68 image)
Nanaimo Ladysmith school district chairperson retains role, new vice-chair chosen

Nanaimo Ladysmith Public Schools held annual general meeting Wednesday

(Black Press file)
RDN strengthens security after being alerted to publicly accessible property ownership information

Regional District of Nanaimo investigates, reports to privacy commissioner after anonymous e-mails

Steve Metcalfe, Quality Foods Harewood store manager, holds a poinsettia and a Coins for Kids donation jar, two symbols of Christmas spirit. (Chris Bush/News Bulletin
Coins for Kids collects for Christmas causes in Nanaimo

News Bulletin fundraising for Great Nanaimo Toy Drive, Boys and Girls Clubs

Motorists wait to enter a Fraser Health COVID-19 testing facility, in Surrey, B.C., on Monday, Nov. 9, 2020. THE CANADIAN PRESS/Darryl Dyck
Another 694 diagnosed with COVID-19 in B.C. Thursday

Three more health care outbreaks, 12 deaths

A 53-unit building to be built at 6010 Hammond Bay Rd. (City of Nanaimo image)
Province announces support for 50 units of affordable housing on Hammond Bay Road

Building B.C. Community Housing Fund partners with Nanaimo Affordable Housing Society

The driver of a car that crashed in downtown Nanaimo Tuesday is facing multiple charges. (Chris Bush/News Bulletin)
RCMP recommending impaired driving charge after crash into lamp post in downtown Nanaimo

Driver sped away after ‘heated argument’ in another part of downtown, say RCMP

Beef to the business at the mall that told me I had to provide personal information for COVID tracing. After assuring me I would not receive marketing e-mails, they proceeded to send me e-mails promoting their business.
Beefs & Bouquets, Dec. 2

To submit a beef or a bouquet to the Nanaimo News Bulletin, e-mail editor@nanaimobulletin.com

A company with a lab in Nanaimo has federal government approval to manage research intended to standardize extraction of a psychedelic compound, psilocybin, from magic mushrooms. (Wikipedia Commons photo)
Experts favour use of magic mushroom derivatives for research into mental health treatment

Educators, researchers see value in studying psilocybin’s effect treating mental health and addiction

Nanaimo City Hall. (News Bulletin file photo)
City of Nanaimo’s financial plan includes $314 million for projects

Potential property tax increase now at 3.0 per cent, budget meetings continuing

A demonstrator wears representations of sea lice outside the Fisheries and Oceans Canada offices in downtown Vancouver Sept. 24, demanding more action on the Cohen Commission recommendations to protect wild Fraser River sockeye. (Quinn Bender photo)
First Nations renew call to revoke salmon farm licences

Leadership council implores use of precautionary principle in Discovery Islands

Ten-month-old Aidan Deschamps poses for a photo with his parents Amanda Sully and Adam Deschamps in this undated handout photo. Ten-month-old Aidan Deschamps was the first baby in Canada to be diagnosed with spinal muscular atrophy through Ontario’s newborn screening program. The test was added to the program six days before he was born. THE CANADIAN PRESS/HO, Children’s Hospital Eastern Ontario *MANDATORY CREDIT*
First newborn tested for spinal muscular atrophy in Canada hits new milestones

‘If Aidan had been born any earlier or anywhere else our story would be quite different’

(Pixabay)
Canadians’ mental health has deteriorated with the second wave, study finds

Increased substance use one of the ways people are coping

Most Read