Published: Thu, December 01, 2016
Economy | By Melissa Porter

Energy exports help economy bounce back with 3.5% growth in third quarter

Canada posted its strongest economic growth in more than two years in the third quarter, as a rebound in exports helped the economy bounce back strongly from its second-quarter slump.

As a result, energy sector exports saw a 6.1% increase after a 5.1% decline over the summer.

The Canadian consumer remained cautiously optimistic, with household spending expanding by 0.6 per cent, about the same rate as in the previous quarter.

Exports of services and consumer goods gained, while increases in household consumption and inventories also boosted broader growth.

Economists are expecting strong numbers for the quarter as the economy rebounded from the contraction seen in the second quarter.

On top of this, Jean added that moving forward he expected Canada to feed off the strong US economy.

The average estimate of 22 economists surveyed by Bloomberg forecast that StatsCan would report Q3 annualized growth of 3.38 per cent.

Plus, there was some relief in the business investment that has held back the economy since oil prices plunged below $50 a barrel and made some Alberta heavy oil sites unprofitable.

Real GDP growth in the third quarter posted its strongest performance since the second quarter of 2014, when it reached was 4.2 per cent.

"On the face of it, it's a pretty positive report", DePratto said in an interview.

Canada's economy grew at the fastest pace in more than two years in the third quarter of 2016, Statistics Canada data shows.

But the long support the economy has received from the housing sector faltered as business investment in residential structures contracted. Statistics Canada said most of the decline was due to a 5.7 per cent drop in ownership transfer costs, which point to movement in the resale market.

The key reading for GDP came ahead of the Bank of Canada's scheduled announcement next week on its trend-setting interest rate, which is widely expected to stay at its low level of 0.5 per cent.

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