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

The first Guerrilla Gig last year was at the forestry museum’s riverside forest walk on July 8. Jared Wayne featuring Nik Winnitowy, wowed the crowd. (Jocelyn Doll/Revelstoke Review)
Guerrilla Gigs returning to Revelstoke this summer

Summer Street Fest is once again cancelled due to pandemic restrictions

Claire Sieber’s piece, Sifting, was one of the winner’s in last year’s contest. (Contributed)
Revelstoke Reflections art contest launched again

This is the second year for the art prize presented by Arts Revelstoke

Tapping Creek ran through the property of Robert Tapping, across the tracks from Campbell Avenue. The house was removed in the 1960s. (Revelstoke Museum and Archives photo 2013)
Glimpses of Revelstoke’s past for May 6

Local history as recorded by the newspaper of the day

Nuns of Mother Teresa’s Missionaries of Charity, carry some of her relics during a vigil of prayer in preparation for the canonization of Mother Teresa in the St. John in Latheran Basilica at the Vatican, Friday, Sept. 2, 2016. In which city did she do much of her charitable work? (AP Photo/Gregorio Borgia)
QUIZ: How much do you know about these motherhood issues?

In honour of Mother’s Day, take this 10-question quiz

A medical worker prepares vials of the COVID-19 vaccines, Chinese Sinopharm, left, Sputnik V, center, and Pfizer at a vaccine centre, in the Usce shopping mall in Belgrade, Serbia, Thursday, May 6, 2021. Serbian authorities are looking for incentives for people to boost vaccination that has slowed down in recent weeks amid widespread anti-vaccination and conspiracy theories in the Balkan nation. The government has also promised a payment of around 25 euros to everyone who gets vaccinated by the end of May. (AP Photo/Darko Vojinovic)
38 new COVID-19 cases, more than 335k vaccines administered in Interior Health

Interior Health also to start targeted vaccinations in high transmission neighbourhoods

(The Canadian Press)
Trudeau won’t say whether Canada supports patent waiver for COVID-19 vaccines

‘Canada is at the table to help find a solution’

The Oliver Fire Department had to put out a fire on their own training ground, and it wasn’t one they set. (Facebook)
Vehicles torched at Oliver Fire Department training grounds

This suspected arson comes after the cars were vandalized earlier and suspicious fire the night before

Tavis Stevenson, son of Pam and Bruce Stevenson, founders of The Book Shop on Main St, is the creator of the whimsical animal farm carts seen above The Book Shop. He also painted the book mural in the back alley behind the shop. (Monique Tamminga Western News)
The Book Shop in downtown Penticton is one of those rare gems

The Book Shop, like so many businesses, is wanting to turn the page to the end of this pandemic

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Spallumcheen councillors (from left) Todd York, Gerry Popoff, Christine LeMaire, John Bakker, Joe Van Tienhoven and Andrew Casson join Mayor Christine Fraser (fourth from left) in helping to proclaim the township open for business with new signage off Highway 97A. (Township of Spallumcheen photo)
Being open for business paying dividends for Okanagan township

Spallumcheen wins provincial award, new business and building starts increase

Pieces of nephrite jade are shown at a mine site in northwestern B.C. in July 2019. THE CANADIAN PRESS/HO-Tahltan Central Government MANDATORY CREDIT
Indigenous nation opposes jade mining in northwestern B.C.

B.C.’s Mines Act requires operators to prepare a plan to protect cultural heritage resources

Salmon Arm Silverbacks forward Mathieu Bourgault (13) tries unsuccessfully to deflect past West Kelowna goalie Johnny Derrick during the Warriors’ come-from-behind 7-6 BC Hockey Leaguje pod shootout victory Saturday, May 8, at Vernon’s Kal Tire Place. (Tami Quan Photography)
West Kelowna Warriors rally to edge Salmon Arm in shootout

Warriors overcome three significant deficits to post 7-6 BCHL pod win in Vernon; Silverbacks finish pod 9-7-2-2

The body of Brenda Ware, 35, was found along Highway 93 in Kootenay National Park on Thursday, May 6, 2021. (RCMP handout)
RCMP ask for tips after woman’s body found in Kootenay National Park

Brenda Ware was found along Highway 93 in the park, 54 kilometres north of the town of Radium

Most Read