Gross domestic product sees first gain in a year in third quarter

TORONTO - Canada's economy inched ahead in the third quarter, meekly heralding an end to the recession and the start of what is predicted to be slow and laborious recovery.
Published : December 01, 2009

TORONTO - Canada's economy inched ahead in the third quarter, meekly heralding an end to the recession and the start of what is predicted to be slow and laborious recovery.

Statistics Canada reported Monday that real gross domestic product, an inflation-adjusted measure of the economic growth, expanded at an annualized rate of 0.4 per cent in the third quarter. That was below the Bank of Canada's two-per-cent growth prediction for the quarter, and economist's expectations for an annualized growth rate of 0.6 per cent, according to CIBC World Markets.

The first overall economic growth in a year marks an end to the recession, which is technically defined as at least two back-to-back quarters of contraction.

By comparison, the American economy registered growth of 2.8 per cent during the same period, Statistics Canada said, though the U.S. has been pulling itself out of a deeper recession.

"We've certainly been slowest out of the gate to economic recovery relative to most of the other major economies," said Avery Shenfeld, chief economist at CIBC World Markets.

"The only plus side here, is that the third quarter ended on a strong note with a healthy GDP gain in September, and that does give us hope that we'll see much better growth for the fourth quarter."

Real GDP - economic growth adjusted for inflation - was up 0.4 per cent in September, the final month of the quarter, as most major industrial sectors increased their production.

Economists have latched onto that optimism as a way to build hope for a stronger recovery into next year, driven by an uptick that is expected to register in the final three months of 2009.

TD Securities Economics strategist Millan Mulraine suggested the fourth quarter could launch a "significant pickup" of about three per cent.

"Looking ahead, we think that the Canadian economy will at least outperform the U.S. economy in the near term," he said.

"One of the things to look at next year is what happens to consumer spending. We think that additional upside could come from net trade if the pickup in the U.S. starts gathering steam."

There was further optimism in a November survey conducted by the Canadian

 
 
Latest From ...
Most Popular From ...