According to figures from Statistics Canada, the fourth quarter of 2016 ended on a high, with real gross domestic product (GDP) growing at a 2.6% annualized rate, outperforming economists’ estimate of 2.0% growth, and well above the more conservative estimate of 1.5% from the Bank of Canada. The growth was driven primarily by household consumption which rose by 2.6%, although it can also be attributed to a strong period for exports of goods and services, and residential construction.
Economists believe the results point to a more positive outlook for future growth. Overall, GDP for 2016 rose 1.4% on the previous year, which shows improvement on the 2015 0.9% growth. However, a sustained lack of business investment since the 2014 drop in oil prices has worried officials at the Bank of Canada, due to the implications for Canada’s long-term growth potential; the figures reveal an 8.2% drop in business investment, the ninth consecutive quarter decrease.
Economists believe the results point to a more positive outlook for future growth. Overall, GDP for 2016 rose 1.4% on the previous year, which shows improvement on the 2015 0.9% growth.
Nevertheless, Canadians are feeling more confident about Canada’s outlook, with the strong numbers close to 2016 reflected in consumer sentiment. RFi Group data shows that the proportion of consumers concerned about the effects of the Canadian economic outlook on their personal situation has dropped since H1 2016 and an increasing number of Canadians are feeling more positive about the economy.
Source: RFi Group Canada Priority and Retail Banking Council H1 & H2 2016