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

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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A woman wearing a face mask to curb the spread of COVID-19 uses walking sticks while walking up a hill, in New Westminster, B.C., on Sunday, November 29, 2020. THE CANADIAN PRESS/Darryl Dyck
Interior Health reports 83 more COVID-19 infections overnight

46 cases are now associated with a COVID-19 community cluster in Revelstoke

Mayor Colin Basran at the announcement of the 2021 Tim Horton’s Brier to be hosted in Kelowna on Nov. 21. (Contributed)
Tim Hortons Brier not coming to Kelowna

The COVID-19 pandemic has prompted Curling Canada to move to hub model, similar to the NHL playoffs

Charitables is partnering with Mamas for Mamas and the Central Okanagan Food Drive for a holiday gift drive. (Charitables)
Shop local, support the vulnerable: Kelowna marketplace partners with charities for holiday gift drive

Charitables is partnering with Mamas for Mamas and the Central Okanagan Food Bank

Renee Merrifield speaking to media on her front doorstep after being declared the winner of the Kelowna-Mission riding for the BC Liberal Party on Oct. 24, 2020. (Michael Rodriguez - Capital News)
Central Okanagan MLA’s take on new roles

Renee Merrifield will be taking over for Norm Letnick as the BC Liberal Caucus’ health critic

A tongue-in-cheek message about wearing a face mask to curb the spread of COVID-19 on a sign outside a church near Royal Columbia Hospital, in New Westminster, B.C., on Sunday, Nov. 29, 2020. THE CANADIAN PRESS/Darryl Dyck
B.C.’s COVID-19 infection count climbs back up to 656

20 more people in hospital, active cases still rising

Brent Ross poses with his dog Jack who died over the weekend after asphyxiating on a ball. Ross hopes his experience serves as a cautionary tale to other dog owners. (Contributed)
Salmon Arm man warns others after dog dies from choking on a ball

Brent Ross grieving the sudden loss of Jack, a healthy, seven-year-old chocolate lab

This year’s Candlelight Vigil, United Against Violence Against Women, on Dec. 6, 2020 will not be in person at the campuses of Okanagan College due to COVID-19, but people will be able to gather online to watch a video presentation and light a candle in remembrance. (Image contributed)
Violence against women in North Okanagan-Shuswap to be remembered online

Participants in virtual vigil Dec. 6 asked to light a candle and post photo on social media

An Enderby restaurant and pub has been shut down since Sunday afternoon, Nov. 29, 2020 as a precaution after a guest reportedly tested positive for COVID-19. (Howard Johnson photo)
Enderby pub shuts down after guest reportedly tests positive for COVID-19

The Howard Johnson hotel, restaurant and pub has been closed since Sunday afternoon, Nov. 29

Robert Gibson, born November 24, 2020 is in BC Children’s Hospital. Photo contributed
Princeton baby fights for his life, with parents at his side

A Go Fund Me campaign has been started to help family with expenses

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Grapevine Optical was the victim of an early morning break and enter Wednesday, Nov. 26, 2020. (Crime Stoppers Okanagan / Facebook)
Collection of designer sunglasses stolen from South Okanagan eye-wear shop

Crime Stoppers is seeking the identity of two male suspects

Most Read