BCREA ECONOMICS NOW

Canadian Q4 Real GDP Growth - March 1, 2013
 

The Canadian economy weakened significantly in in the second half of 2012, posting growth of just 0.6 in both the third and fourth quarter respectively. For all of 2012, the Canadian economy expanded 1.8 per cent.

Although consumers ramped up spending in the second half of 2012, households continue to undergo significant de-leveraging following several years of low-interest debt accumulation. Excluding recessionary periods, household credit is currently growing at its slowest pace in nearly 30 years, which will likely translate into slower spending. Besides a likely slowdown in consumer spending, a much needed pivot from consumption to business investment driven growth looks doubtful. Anticipated investment for 2013 is set to rise just 1.7 per cent, the smallest increase since 2009.  Add-in a still struggling global economy and you have a Canadian economy that will likely struggle with below 2 per cent growth for much of 2013 before picking up in 2014. 

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