The percentage growth measures the real gross domestic product (that is, the value of total output of good and services, removing the effects of inflation). It is also the quarterly change at annualized rates—meaning the percentage change that would be experienced in a complete year if the quarterly change was to be maintained for four quarters.
The second quarter expansion is the strongest rate of growth the economy has seen since 2011. “The quarterly growth was a result of increased economic activity in all sectors of the economy except non-profit institutions serving households,” says Statistics Canada in its press release.
Today’s report should cheer markets and policy makers, many of whom have become concerned about the Canadian economy stalling out in 2014. Two areas of greatest concern were exports and the slow growth in business investment (i.e., companies spending money on new plants, equipment and buildings).
Fortunately, total business investment expanded smartly in the second quarter following two quarters of contraction. Exports also did well. Exports of goods and services increased 4.2 per cent (quarter-over-quarter) following a 0.2 per cent decline during the first quarter of the year.