Canada's GDP Up 2.7% In 2006

March 4, 2007
Higher personal spending and strong exports cause increase.

Economic activity eased slightly in 2006, advancing 2.7% over the year, Statistics Canada said March 2. In the fourth quarter, real gross domestic product (GDP) was up 0.4%, following increases of 0.5% in the second and third quarters, according to the agency.

Throughout 2006, the government agency said: "Growth was largely driven by higher personal expenditure and the strengthening of exports. However, these gains were dampened by the drawdown of non-farm inventories."

Consumer spending was the leading contributor to real GDP growth in 2006 advancing 4.1% its best performance since 1997. A solid first quarter helped establish strong annual growth in expenditures on both durable (up 6.8%) and semi-durable goods (up 7.2%), the government agency said.

The energy sector also continued to advance but at a much slower pace than in the last four years.

Manufacturing, forestry and logging were hit hard.

Business investment, meanwhile, was the main contributor to investment's strong positive impact on GDP in 2006, buoyed by a 14% increase in engineering investment. This was principally concentrated in non-conventional oil and gas extraction, where investment nearly doubled in 2006, as considerable infrastructure was added to the Alberta oil sands.

Copyright Agence France-Presse, 2007

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