1. Date: August 31, 2010
Canadian Gross Domestic Product, Second Quarter and June 2010
Source: Statistics Canada
Link to Release:
http://www.statcan.gc.ca/daily-quotidien/100831/dq100831a-eng.htm
Summary: Canada’s Real Gross Domestic Product (GDP), the most common
measure of economic growth, increased 0.5 per cent in the second quarter for
an annualized growth rate of 2.0 per cent. This is well below the 5.8 per cent
annualized growth rate reported for the first quarter of this year. In June,
Canadian GDP rose 0.2 per cent over May for the strongest monthly gain of
the second quarter. The goods producing sector led second quarter economic
growth, while service sector output remained flat.
Analysis: The decline in the GDP growth rate between the first and second
quarters can be traced to several sources, but the impact of housing-related
sectors was quite notable. Housing investment, which drove GDP growth
through much of the initial 2009 recovery, increased by only 0.3 per cent in the
second quarter. Economic activity specifically related to real estate agents and
brokers was down. Renovation activity also declined. Declines related to
residential real estate contributed to an overall dip in consumer spending. A
slowdown in the consumer-driven side of the economy was not necessarily
unexpected, as second quarter interest rate increases and stricter mortgage
lending guidelines came on line. With this said, the second quarter GDP result
was well below the Bank of Canada’s latest published forecast of three per
cent annualized growth. This coupled with less than stellar employment
releases in recent months increases the odds that we could see an earlier than
expected interruption in Bank of Canada interest rate hikes.
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
Source: Statistics Canada
Canadian Real GDP, Quarterly
Annualized Quarter-Over-QuarterPerCent Change
-1.2%
-0.8%
-0.4%
0.0%
0.4%
0.8%
Source: Statistics Canada
Canadian Real GDP, Monthly
Month-Over-Month PerCent Change
Written By:
Jason Mercer
TREB Senior Manager of Market Analysis.
jmercer@trebnet.com