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Tab 4 Real GDP by expenditure First quarter 2019 0.1% (quarterly change) Household saving rate 1.1% First quarter 2019 Household disposable income First quarter 2019 0.9% (quarterly change) Terms of trade 93.9 (2012=100) First quarter 2019

Real gross domestic product (GDP) grew 0.1% in the first quarter, the same growth rate as the fourth quarter of 2018. Real gross national income rose 0.9%, largely because of higher export prices of crude oil and crude bitumen. Higher consumer spending raised final domestic demand, which rebounded 0.8% after a 0.2% decline in the previous quarter.

Expressed at an annualized rate, real GDP increased 0.4% in the first quarter. In comparison, real GDP in the United States grew 3.2%.

Chart 1

Gross domestic product and final domestic demand

Growth in real GDP was driven by a 0.9% increase in household spending and an 8.7% rise in business investment in machinery and equipment. These increases were moderated by a 1.0% decline in exports, coupled with a 1.9% increase in imports. Additionally, investment in housing continued to decline, down 1.6% in the first quarter.

Businesses accumulated $16.1 billion of non-farm inventories in the first quarter, pushing the economy-wide stock-to-sales ratio up from 0.838 in the fourth quarter of 2018 to 0.846. Accumulation of cannabis stocks largely contributed to the $1.7 billion increase in farm inventories.

Chart 2

Contributions to percentage change in real gross domestic product, first quarter 2019

Household spending accelerates

Increases in household spending were broad based. Outlays on durable goods rebounded 1.2% in the first quarter, following a 0.5% decline in the fourth quarter of 2018. Vehicle purchases increased 0.9%, following a 0.8% decline. Similarly, household spending on audio-visual and information processing equipment rose 3.1%, following a 0.9% drop.

Outlays on semi-durable goods rose 1.2%, while non-durable goods increased 0.7%, including consumer spending on cannabis, up 5.5% following a 5.3% increase in the fourth quarter of 2018. Outlays on services rose 0.8%, led by life insurance and financial services (+2.1%).

Housing investment remains soft

Housing investment fell 1.6% in the first quarter, the fifth consecutive quarterly contraction. Declines in new home construction (-3.6%) and ownership transfer costs (-3.2%) were slightly offset by increased renovation activity (+1.8%).

Non-residential business investment rebounds

Overall business investment in non-residential structures and machinery and equipment rebounded 3.2% in the first quarter, following a 2.5% decline in the previous quarter.

The strength was mainly attributable to an 8.7% rise in machinery and equipment investment, with increases in eight of the nine sub-categories. Significant investment was recorded in aircraft and other transportation equipment, corresponding to strong imports. Business investment in non-residential buildings rebounded 2.3%, following a decline of a similar magnitude in the fourth quarter of 2018. The increases in machinery and equipment and non-residential buildings were partly offset by declines in investment in engineering structures (-1.7%).

Investment in intellectual property products declined 1.1%, due to reduced mineral exploration and evaluation. Business investment in research and development rose 1.0% for the quarter.

Exports decline, while imports increase

Export volumes declined 1.0% in the first quarter, the first decrease since the third quarter of 2017. A 0.9% rise in services exports moderated a 1.5% drop in goods exports. There were substantial volume declines in exports of farm and fishing products (-9.5%), and crude oil and crude bitumen (-2.8%). Exports of commercial services rose 1.3%, after a 1.6% increase in the fourth quarter of 2018.

Chart 3

Real exports and real imports of goods and services

Import volumes rose 1.9% in the first quarter, following a 0.2% drop in the fourth quarter. Aircraft, aircraft engines and aircraft parts (+38.6%), passenger cars and light trucks (+10.4%) and pharmaceuticals and medicinal products (+9.6%) were the main contributors to the increase. Imports of energy products were down 5.4%, largely because of lower crude oil and crude bitumen imports.

Real gross national income rises as terms of trade improve

Canada's terms of trade—the ratio of the price of exports to the price of imports—rebounded 2.4% in the first quarter, after a 3.8% decrease in the fourth quarter of 2018. Export prices were up 2.5%, while import prices were flat. Notably, prices of exported crude oil and crude bitumen rebounded 29.2%, after falling 35.4% in the previous quarter.

Improved terms of trade led to a 0.9% gain in real gross national income, the real purchasing power of income earned by Canadian-owned factors of production. The GDP implicit price index, which reflects the price of domestically-produced goods and services, rose 1.1% in the first quarter, after decreasing 0.8% in the fourth quarter of 2018.

Corporate earnings and household disposable income grow

Growth in nominal GDP rebounded 1.2% in the first quarter, following a 0.8% drop in the fourth quarter of 2018. Nominal gross operating surplus of non-financial corporations rose 1.7%, following a 6.2% decline in the previous quarter.

A 1.0% increase in compensation of employees, evidenced in both goods- and services-producing industries, resulted in a 0.9% rise in household disposable income. Higher household spending, however, lowered the household saving rate from 1.4% in the fourth quarter of 2018 to 1.1% in the first quarter.

Sustainable Development Goals On January 1, 2016, the world officially began implementation of the 2030 Agenda for Sustainable Development—the United Nations' transformative plan of action that addresses urgent global challenges over the next 15 years. The plan is based on 17 specific sustainable development goals. Data on gross domestic product, income and expenditure are an example of how Statistics Canada supports the reporting on the Global Goals for Sustainable Development. This release will be used in helping to measure the following goals:

Note to readers Percentage changes for expenditure-based statistics (such as household spending, investment, exports, and imports) are calculated from volume measures that are adjusted for price variations. Percentage changes for income-based statistics (such as compensation of employees and operating surplus of corporations) are calculated from nominal values; that is, they are not adjusted for price variations. There are two ways of expressing growth rates for gross domestic product (GDP) and other time series found in this release: Unless otherwise stated, the growth rates in this release represent the percentage change in the series from one quarter to the next, such as from the fourth quarter of 2018 to the first quarter of 2019. Quarterly growth can be expressed at an annual rate by using a compound growth formula, similar to the way in which a monthly interest rate can be expressed at an annual rate. Expressing growth at an annual rate facilitates comparisons with official GDP statistics from the United States. Both the quarterly growth rate and the annualized quarterly growth rate should be interpreted as an indication of the latest trend in GDP. For information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions. Revisions Data on GDP for the first quarter of 2019 have been released along with revised data from the first quarter of 2018. These data incorporate new and revised data, as well as updated data on seasonal trends. Real-time tables Real-time tables 36-10-0430-01 and 36-10-0431-01 will be updated on June 10. Next release Data on GDP by income and expenditure for the second quarter will be released on August 30.

Products

The data visualization product "Infrastructure Statistics Hub," which is part of Statistics Canada – Data Visualization Products (Catalogue number71-607-X), is now available.

The product Cannabis Stats Hub (Catalogue number13-610-X) is available.

The Latest Developments in the Canadian Economic Accounts (Catalogue number13-605-X) is available.

The User Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-606-G) is available.

The Methodological Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-607-X) is available.

Contact information

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