Canadian GDP Barely Crawling

June 2, 2008

Over the last two calendar quarters, real growth in Canada amounted to 0.2% at a seasonally adjusted annualized rate, a half-percentage point below the U.S. pace of 0.7% saar. Personal consumption soared 5.3% saar, more than three times faster than in the United States, but exports sank 5.8% saar compared to a 4.6% increase in the United States. Non-residential capital investment recorded similar gains of 3.9% saar in Canada and 2.8% in the Uniited States. Canada had stronger government spending (4.2% versus 1.9%) and residential investment (a drop of 2.6% versus a U.S. plunge of 25.3%). In just 1Q08, inventories exerted a huge 4.6 percentage point drag on Canadian growth of -0.3% saar, whereas such accounted for 0.2 percentage points of the 0.9% growth in U.S. real GDP.

Canada’s supply-side monthly GDP data have been just as gloomy as the quarterly national income account statistics. In the five months between October and March, real GDP fell 1.4% saar, with a 9.9% plunge of industrial production outweighing positive growth of 1.4% in services.



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