Canada's economy grows 3.7 percent annualized in first quarter

Canada's GDP grew at a 3.7-per-cent pace in the first three months of 2017, more than tripling the U.S.'s 1.2-per-cent pace, StatsCan reported on Wednesday.

At the same time, though, support activities for the mining and oil and gas extraction sector grew by 9.9 per cent.

Growth in both goods-producing and service-producing industries helped push March's growth up 0.5 percent after February's flat growth.

Economists were projecting a 4.2 percent first-quarter annualized pace and 0.2 percent gain in March.

Overall, Canada's economy expanded at an annual pace of almost four per cent in the first quarter of 2017 - more than triple the rate of GDP growth in the United States over the same period.

While the first-quarter was also shy of the Bank of Canada's forecast for 3.8 per cent, it made Canada a growth leader among its industrialized peers at the start of the year.

The experts promised us a "barnburner" of a first quarter for Canada's economy, and the economy delivered.

"It wasn't really far from broad expectations, but I would say at the margin, it's mildly supportive for the Canadian dollar and slightly moves us another step towards the Bank of Canada raising rates".

The surge in first-quarter expansion means Canada has shifted from being a laggard among major industrialized economies, as it struggled under lower commodity prices, to emerging as a growth leader. This has much to do, she said, with concerns related to trade policy as the Trump administration seeks changes to the North American Free-Trade Agreement; uncertainty related to commodity prices; and the state of the country's housing market.

Meanwhile, consumers continued to spend, particularly on vehicles.

However, Porter noted that exports were an area of key weakness in the GDP report.

Business investment in residential structures grew 3.7 per cent, boosted by new construction, the strong real estate market in Ontario and a gain in renovation activity.

After falling in four of the previous five quarters, investment in machinery and equipment advanced 5.8 per cent.

The data agency also revised growth upward for 2016, saying the economy advanced 1.5% versus the early estimate of a 1.4% rise.

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