Canada: Economic growth slows in the third quarter
November 30, 2012
In the third quarter, GDP increased at a seasonally-adjusted annualized rate (saar) of 0.6% over the previous quarter. The result came in below both the 1.7% expansion recorded in the second quarter (previously reported: +1.8% quarter-on-quarter saar) and market expectations of a 0.8% rise. The deceleration in the third quarter mainly reflected a deterioration in fixed investment as well as in net exports. Private consumption grew 3.8% in the third quarter (Q2: +0.6% qoq saar), while government consumption expanded 1.2% (Q2: +0.1% qoq saar). Business fixed investment, on the other hand, swung from a 4.9% increase in the second quarter to a 2.9% decline in the third. That said, GDP growth was positively affected by a build-up in inventories. Meanwhile, exports of goods and services contracted 7.8% (Q2: +0.1% qoq saar), whereas imports rose 1.7% (Q2: +1.9% qoq saar). As a result, the contribution from net exports to overall economic growth deteriorated from minus 0.6 percentage points in the second quarter to minus 3.0 percentage points in the third.