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.

Just Posted

Convicted animal abuser to return to B.C. court May 21

Catherine Jessica Adams is facing a breach of probation charge

Healthcare travelling roadshow aims to inspire high school students across B.C

Over 2,000 youth in different rural communities will be visited through this project

Gallery: Project Heavy Duty inspires students into it’s 32nd year

The event is a collaboration between SD91 and industry in and around Vanderhoof, Fraser Lake and Fort St. James

Madison Scott’s mother hosts event to keep search for her missing daughter alive

Eight years ago, the Vanderhoof teenager disappeared, and the RCMP continue to chase leads

Telkwa pot plant application passes review

Cannabis company claims new Health Canada regulations are working in its favour

QUIZ: Test your knowledge of Victoria Day

How much do you know about the monarch whose day we celebrate each May?

Take-home drug testing kits latest pilot to help curb B.C.’s overdose crisis

Researchers look to see if fentanyl testing could be a useful tool for those who use drugs alone

Facebook takes down anti-vaxxer page that used image of late Canadian girl

Facebook said that the social media company has disabled the anti-vaccination page

Search crews rescue kids, 6 and 7, stranded overnight on Coquitlam mountain

Father and two youngsters fall down a steep, treacherous cliff while hiking Burke Mountain

Raptors beat Bucks 118-112 in 2OT thriller

Leonard has 36 points as Toronto cuts Milwaukee’s series lead to 2-1

‘Teams that win are tight’: B.C. Lions search for chemistry at training camp

The Lions added more than 50 new faces over the off-season, from coaching staff to key players

Rescue crews suspend search for Okanagan kayaker missing for three days

71-year-old Zygmunt Janiewicz was reported missing Friday

B.C. VIEWS: Reality of our plastic recycling routine exposed

Turns out dear old China wasn’t doing such a great job

Carbon dioxide at highest levels for over 2.5 million years, expert warns of 100 years of disruption

CO2 levels rising rapidly, now higher than at any point in humanity’s history

Most Read