Release date: June 1, 2018
Review of Economic Statistics — June 1, 2018 - Transcript
(The Statistics Canada symbol and Canada wordmark appear on screen with the title: "Review of Economic Statistics — June 1, 2018")
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Richard Evans: Welcome to the Review of Economic Statistics. I'm Richard Evans.
Guy Gellatly: And I'm Guy Gellatly.
(Text on screen below presenters: "Richard Evans, Director General, Industry Statistics. Guy Gallatly, Principal Researcher.")
Richard Evans: Guy, we have some fresh numbers on economic growth. The first quarter of 2018 is now out. Looking back at the previous year, we know things slowed down in the second half. In Quarter 3 and Quarter 4, it came in at about 0.4. That was slower. What is the first quarter of 2018 looking like?
Guy Gellatly: Well, we had a slight deceleration in the pace of growth early in the year. The economy expanded 0.3% in that first quarter. And that follows gains of 0.4% in both the third and fourth quarters of last year. So generally, we're seeing a moderation in those numbers, and that's consistent with what we've seen across many G7 economies in the first part of this year.
(Text on screen below presenters: "The economy expanded 0.3% in the first quarter of 2018.")
Richard Evans: So, we're not alone. What were the causes or contributing factors for that slower growth that we're seeing now?
Guy Gellatly: Well, here in Canada, three factors, really: first, slower growth in household spending, lower exports of non-energy products and weaker business investment in that first quarter. So, if you look at household spending, and remember, household spending accounted, back in 2017, it was about two-thirds of the overall growth in the economy for the whole year.
Richard Evans: That was significant.
Guy Gellatly: But generally, we've seen a sort of slower pace of household spending over recent quarters. It was up 0.3% in the first quarter of this year. A lot of that momentum was really coming on the services side. For goods, goods spending was relatively unchanged in the quarter, and spending on auto is a pretty good example of that. And on the exports side, you have slower volumes, you still have growth, but slower growth, really, in the first quarter of this year. And you're getting some strength coming both on the services side of exports and certainly from things like crude, but generally, those non-energy products have started to slow a little bit. We saw that in early 2018.
Richard Evans: OK, and what about investment and housing activity?
Guy Gellatly: Well, interesting there, a pretty notable decline in those numbers. It was the largest quarterly decline in housing investment that we've had since early 2009. The key factor there was really lower spending on ownership transfer costs. So basically, what that is is the volume of activity that we're seeing in resale markets. And it was down pretty notably in that quarter.
Richard Evans: OK, so a negative story for housing investment. What about business investment?
Guy Gellatly: Well, business investment is an area where we've seen a fair amount of growth. If we look back at 2017 again, some consistent gains in those numbers, particularly in terms of machinery and equipment. Machinery and equipment spending was up in the early part of 2018. It was up certainly in late 2017. So some reasonable growth over the last couple of quarters there. We also had some stronger business spending on intellectual property in the first part of 2018 as well.
Richard Evans: Now, the monthly GDP for March 2018 is also out. That affords us an industry view. So, what did that tell us, and how did the quarter end, in effect?
Guy Gellatly: Well, a strong solid growth rate to end the quarter. The economy was up 0.3% in March, fairly broad-based gains across industries there. One of the key contributions was certainly higher non-conventional oil extraction in the month as well.
(Text on screen below presenters: "Real GCP advanced 0.3% in March, reflecting board-based gains among industries.")
Richard Evans: Right, so thank you for watching. For more information on the gross domestic product, or the many economic indicators that feed it, please consult our website.
(Text on screen below presenters: "www.statcan.gc.ca")
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