No doubt demand from the US for forestry products has declined. I wonder how much longer consumer spending will increase when debt levels are high.
Economy grows at slowest rate since 2003
Last Updated: Friday, March 2, 2007 | 10:49 AM ET
Canada's economy grew at an annualized rate of 1.4 per cent in the last quarter of 2006, marking the weakest quarterly growth in more than three years.
Still, that topped the expectations of market watchers who had been expecting growth of 1.2 per cent.
Higher consumer spending and export growth were the main drivers in the year-end growth, Statistics Canada said Friday.
Fourth-quarter growth was down from the two per cent annualized growth seen in the second and third quarters and 3.8 per cent in the first quarter of 2006.
On a monthly basis, however, the economy showed signs of picking up. December's growth was 0.4 per cent, up from November's 0.3 per cent and October's 0.1 per cent expansion.
"Despite the meek growth, there are certainly grounds for optimism, as all of the weakness was due to inventory cuts, while December’s gain provides a decent hand-off for [first-quarter] growth," said BMO Capital Markets deputy chief economist Douglas Porter.
He said the bigger issue for the growth outlook is the state of the U.S. economy, which has been producing mixed results lately.
"We look for a weaker average Canadian GDP growth rate for all of 2007 — at 2.3 per cent — although growth should gradually pick up as the year progresses," he said.
For all of last year, Canada's economy expanded by 2.7 per cent, led by the construction, retail and wholesale trades and the finance and insurance sectors. In 2005, the economy grew by 2.9 per cent.
"Consumer spending was the leading contributor to real GDP growth in 2006, advancing 4.1 per cent, its best performance since 1997," Statistics Canada said in a statement.
The energy sector continued to grow in 2006, but its pace of expansion was "much slower" than during the last four years, StatsCan said. But the agency said manufacturing, forestry, and logging were "hard hit" last year.