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The main contributor to growth in the quarter was household spending, which rose by 1.4 per cent, the biggest increase since the second quarter of 2022. Residential construction also rose by 3.9 per cent during the quarter, the largest jump since the beginning of 2021.
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Exports and imports also provided a tailwind. Exports of goods and services rose by 1.8 per cent, after posting a decline of 0.2 per cent in previous quarter. The rise in exports was driven by increases in unwrought gold, silver and platinum group metals; crude oil and bitumen; and passenger cars and light trucks. Imports of goods and services increased 1.3 per cent in the fourth quarter, after declines in the previous quarter.
Business investment rose in the final quarter of 2024, with investment in machinery and equipment posting an increase of 4.2 per cent.
The fourth-quarter growth results topped the expectations of the Bank of Canada and economists. The yearly growth rate was also above the central bank’s 1.3 per cent forecast.
On a per capita basis, GDP gained 0.2 per cent in the final quarter of 2024, only the second quarterly increase in the last seven quarters.
An early estimate shows Canada’s economy grew by 0.3 per cent in January. This was driven by increases in mining, quarrying and oil and gas extraction, wholesale trade and transportation and warehousing.
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Statistics Canada also posted significant upward revisions for growth in the second and third quarters of 2024. Originally, Statistics Canada recorded 2.2 per cent annualized growth in the second quarter, but this has been revised up to 2.8 per cent. Third quarter growth has also been revised up from one per cent to 2.2 per cent. Statistics Canada says this was driven by upward revisions to government spending and downward revisions of imports.
Canada’s economy faces significant risks in 2025, with the looming threat that the U.S. will impose 25 per cent tariffs on goods and a 10 per cent tariff on energy. A pause on the implementation of the tariffs is set to end on Tuesday.
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Bank of Canada governor Tiff Macklem has warned that damage to the Canadian economy caused by tariffs would be permanent and there would be no “bounceback.” The central bank estimates investment would decline by 12 per cent and exports would decrease by 8.5 per cent, after the first year of a trade war with the U.S. Canadian growth would decrease by three per cent over two years.
• Email: jgowling@postmedia.com
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