Economic growth slowed in the fourth quarter to cap off year of 1.8% growth

Economists had expected growth at an annualized pace of 1.2 per cent for the final quarter of 2018

The economy expanded at an annualized pace of 0.4 per cent over the final three months of 2018 as the country posted its weakest quarterly growth since the middle of 2016, Statistics Canada said Friday.

The agency’s latest figures for real gross domestic product show that for all of last year the economy grew 1.8 per cent, compared with the three per cent expansion in 2017.

The fourth-quarter reading of 0.4 per cent came in lower than Canada’s two per cent growth in the previous quarter.

Economists had expected growth at an annualized pace of 1.2 per cent for the final quarter of 2018, according to Thomson Reuters Eikon.

Statistics Canada said the late-2018 slowdown was mostly due to a 2.7 per cent contraction, on a quarter-over-quarter basis, in investment spending. Overall exports saw a slight decline and household spending slowed for a second straight quarter.

The declines, the report said, were largely offset by higher inventory accumulation.

The agency also released downward revisions for the first half of 2018 that dropped the second-quarter reading to 2.6 per cent and the first-quarter number to 1.3 per cent.

Canada’s terms of trade — a comparison of the prices of exports versus the prices of imports — saw its biggest drop since early 2009, the report said. It fell 3.6 per cent in the fourth quarter, which was mostly due to a 34.3 per cent decline in crude exports.

The agency said lower export prices led to a one per cent decline in real gross national income, which represents the real purchasing power of income earned. It was the steepest drop since the first quarter of 2015.

On Friday, for the first time, the impacts of cannabis legalization were reflected in Statistics Canada’s real GDP report. Canada legalized recreational pot in October.

Household spending on marijuana, at an annual rate, totalled $5.9 billion in the fourth quarter — with illegal pot accounting for $4.7 billion of the total and legal weed representing $1.2 billion.

“Cannabis accounted for 0.5 per cent of total household spending,” the report said of the quarterly numbers. “And non-medical cannabis accounted for 11.2 per cent of spending on alcohol, tobacco and cannabis.”

The lower GDP figure for all of 2018 reflected a slowdown in most categories, including weaker results for household consumption, business investment and housing investment, which contracted 2.3 per cent. The agency said the drop in housing investment coincided with rising interest rates and stricter mortgage rules came into force.

In December, economic growth contracted 0.1 per cent for the second consecutive month and the third decline in four months.

Andy Blatchford, The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Back in Time

Historical Perspective

The story of Rotary Richard

People have until April 6 to make their guess

B.C. minister says rural internet is ‘railroad of the 21st century’

Jinny Sims talks details about the $50-million provincial and possible $750-million federal funds

Local contribution to a global issue

Global Climate Strike for Future

VIDEO: Can you believe it? This B.C. hill pulls cars backwards up a slope

Sir Isaac Newton had clearly never been to this Vernon anomaly when he discovered gravity

B.C. man sentenced for tying up, assaulting and robbing another man at hotel

Gabriel Stephen Nelson robbed and assaulted travelling businessman in Nanaimo in 2017

B.C. girl and her toy monkey make videos to fight negativity on Facebook

Ava Ast created the Ava and Cello’s Good Deed Page last month

Deadline extended through April to nominate top B.C. educators

Second year of Premier John Horgan’s awards offers $3,000 bursary

Paramedic staff shortage at critical level: B.C. union

A number of units were out of service due to lack of staffing in Lower Mainland, union says

B.C. lottery winner being sued by Surrey co-workers

They claim he owes them $200,000 each, in a lawsuit filed in B.C. Supreme Court in Vancouver

Fraser Health under fire again for taxiing homeless man from Langley to Hope

Patient sent to Hope shelter because a spot in the man’s home community couldn’t be located

Dead sea lion discovered on Hornby Island shoreline

Reports indicate animal was shot in the head

Celina Caesar-Chavannes quits Liberal caucus, sits as independent MP

The Whitby, Ont., MP has been a vocal supporter of Jody Wilson-Raybould and Jane Philpott

Most Read