Canadian GDP Growth Quickened at the Turn of the Year

March 31, 2010

The monthly supply-side index of Canadian real GDP rose 0.6% in January after back-to-back 0.5% gains in the final two months of 2009, led by increases of 2.9% in wholesale turnover, 1.9% in factory output, and 1.7% in construction. A 12-month increase in GDP of 1.3% understates the economy’s momentum since September.  Over the past five reported months, GDP grew 6.2% at an annualized pace (saar), with gains of 12.4% saar in industrial production  (representing 19.7% of the economy), 13.5% saar in manufacturing, 20.7% saar in wholesaling (5.9% of GDP), 11.7% saar in construction and 9.0% saar in energy.  Financial services (accounting for 21.1% of GDP) have underperformed the whole economy, showing no growth between December and January and an annualized gain of 3.7% during the last five reported months.  On a national income accounts basis, real GDP in the fourth quarter advanced 5.0% saar, only slightly more slowly than the 5.6% U.S. pace.  Growth in calendar years 2008 and 2009 of +0.4% and minus 2.6%, respectively, were likewise very similar to the U.S. results of +0.4% and minus 2.4%.  Canada benefits from the recovery of U.S. demand and commodity prices.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express consideration.



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