The Canadian economy has posted strong growth, rising at a 3.4 per cent pace in the second quarter of 2007, driven largely by consumer and investor spending.
Statistics Canada released the numbers Friday after the gross domestic product for the first quarter of the year was revised upwards to 3.9 per cent, from earlier estimates of 3.7 per cent.
This is the second straight quarterly report of strong growth.
The Bank of Canada had predicted a second quarter growth rate of 2.7 per cent.
StatsCan reported:
- Businesses experienced growth and built inventories;
- Exports rose despite substantial rises in the Canadian dollar;
- Gas and oil exploration rebounded in the second quarter;
- and consumer spending was up 1.2 per cent as Canadians purchased vehicles, household appliances and recreational, sporting and camping equipment, based on income gains.
Canadians were also buying homes despite increases in mortgage rates. In the second quarter investments in housing rose 1.3 per cent, down from a strong 2 per cent rate in the first three months of 2007.
Businesses were buying machinery and equipment.
Much of the domestic demand is being fueled by strong job creation, the relatively low cost of borrowing and the ongoing boom in the West.
Business News Network's Linda Sims said growth is happening across almost all sector.
"What you're seeing is really an economy that's firing on almost all cylinders. The only point of weakness in the Canadian economy right now is our factory sector and that's due to the slowdown in the U.S. and the high Canadian dollar contributing to curb our exports, but all in all pretty good news," Sims told Â鶹´«Ã½net.
More second quarter details from Statistics Canada:
- Housing investments were up 1.3 per cent following an increase of 2 per cent in the first quarter
- Machinery and equipment spending was up while business non-residential spending slowed
- Building investment advanced 2.2 per cent while the engineering construction rate was flat due to weak drilling activity in the mining sector
- Exports of goods and services rose 0.7 per cent in the second quarter
- Energy products surged 3.3 per cent
- Automotive products fell 2.7 per cent while industrial goods and materials rose 1.2 per cent.
