Issue 16-107: Quarterly GDP

June 1, 2016

The Canadian economy picked up speed in the first quarter, growing 0.6% (seasonally adjusted at annual rates, chained 2007 dollars) after inching ahead (+0.1%) at the end of 2015. The improvement was due to a combination of growth in both domestic and export demand for goods and services.

Final domestic demand was a major factor contributing to economic growth for the first time since late 2014, increasing 0.3% in the first quarter. Household consumption expenditures continued to rise at a steady pace (+0.6%), while spending by non-profit institutions serving households (+0.6%) and general government final consumption expenditure (+0.4%) accelerated in the first quarter.

Gross fixed capital formation remained weak (-0.4%). Business spending on fixed capital continued to slip (-0.4%), marking a fifth straight quarterly decline. Although spending on residential structures surged ahead (+2.7%), investment in non-residential structures, machinery and equipment (-2.5%) and intellectual property products (-1.4%) continued to fall.

Governments also kept a lid on capital spending, with investment dropping off (-0.6%) for a fourth straight quarter.

Businesses continued to draw down their inventories, with the value of inventories held by businesses shrinking (-$6.9 billion) in the first quarter.

Canadian exports were up (+1.7%) after slipping at the end of 2015, while the value of goods and services imported into Canada inched up (+0.3%) for the first time since early 2015.

Data Source: Statistics Canada