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

An x-ray tech demonstrates the new equipment in use. (Photo Submitted)
New diagnostic equipment now operational at Sylvan Lake AACS

In August it was announced that Stephen and Jacqueline Wuori donated $850,000 to AACS

People skate on a lake in a city park in Montreal, Sunday, January 10, 2021. THE CANADIAN PRESS/Graham Hughes
The end of hugs: How COVID-19 has changed daily life a year after Canada’s 1st case

Today marks the one year anniversary of COVID-19 landing in Canada

SARS-CoV-2 virus particles, which causes COVID-19, emerge from the surface of cells isolated from a patient in the U.S. and cultured in a lab in a 2020 electron microscope image. THE CANADIAN PRESS/AP-HO, National Institute of Allergy and Infectious Diseases - Rocky Mountain Laboratories
Alberta adds 463 new COVID-19 cases on Sunday

The central zone has 818 active cases

As of Friday, Alberta has under 10,000 active COVID-19 cases. (Image courtesy CDC)
Alberta identifies 573 new COVID-19 cases, 13 deaths on Saturday

There are currently 9,727 active cases of the virus in the province

Terrance Josephson of the Princeton Posse, at left, and Tyson Conroy of the Summerland Steam clash during a Junior B hockey game at the Summerland Arena in the early spring of 2020. (John Arendt - Summerland Review)
QUIZ: How much do you know about hockey?

Test your knowledge of Canada’s national winter sport

Red Fraggle, one of Jim Henson Company’s Fraggle Rock characers, is shown at Time To Play Holiday Show, Tuesday, Sept. 28, 2010, in New York. The Jim Henson Company says production has officially started in Calgary on a reboot of the original 1980s children’s puppet series, which was filmed in Toronto.THE CANADIAN PRESS/AP/Mark Lennihan
‘Fraggle Rock’ children’s puppet series reboot starts production in Calgary

A spokesperson says the new series will stream on Apple TV plus

Black Press file photo
Wetaskiwin RCMP investigate fatal pedestrian collision

A 37-year-old man from Maskwacis has died in hospital as a result of his injuries.

A registered nurse prepares a dose of the Moderna COVID-19 vaccine in Halifax on Monday, Jan. 11, 2021. Yukon’s Minister of Community Services, John Streiker, says he’s outraged that a couple from outside the territory travelled to a remote community this week and received doses of COVID-19 vaccine. THE CANADIAN PRESS/Andrew Vaughan-POOL
Couple charged after travelling to Yukon to get COVID-19 vaccine

The maximum fine under the emergency measures act is $500, and up to six months in jail

Metis Nation of B.C. President Clara Morin Dal Col poses in this undated handout photo. The Metis Nation of B.C. says Dal Col has been suspended from her role as president. The Metis Nation of B.C. says Dal Col has been suspended from her role as president. THE CANADIAN PRESS/HO, Metis Nation of B.C. *MANDATORY CREDIT*
Metis Nation of B.C. suspends president, citing ‘breach’ of policies, procedures

Vice-president Lissa Smith is stepping in to fill the position on an acting basis

Prime Minister Justin Trudeau speaks in the in the House of Commons on Parliament Hill in Ottawa on Thursday, Dec. 3, 2020. THE CANADIAN PRESS/Justin Tang
Payette shouldn’t get same benefits as other ex-governors general: O’Toole

Former governors general are entitled to a pension and also get a regular income paid to them for the rest of their lives

A woman injects herself with crack cocaine at a supervised consumption site Friday, Jan. 22, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Drug users at greater risk of dying as services scale back in second wave of COVID-19

It pins the blame largely on a lack of supports, a corrupted drug supply

RCMP. (Phil McLachlan - Black Press Media)
Blackfalds RCMP investigate fatal collision

Preliminary investigation revealed a south bound pickup truck collided with an eastbound car

Jennifer Cochrane, a Public Health Nurse with Prairie Mountain Health in Virden, administers the COVID-19 vaccine to Robert Farquhar with Westman Regional Laboratory, during the first day of immunizations at the Brandon COVID-19 vaccination supersite in Brandon, Man., on Monday, January 18, 2021. THE CANADIAN PRESS/Tim Smith - POOL
Top doctor urges Canadians to keep up with COVID measures, even as vaccines roll out

More than 776,606 vaccines have been administered so far

Most Read