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Economic growth in 2003 a mere shadow of past performance

OTTAWA, Ont. -- Real gross domestic product (GDP) advanced 1.7% in 2003, almost half the pace set in 2002, as expor...

OTTAWA, Ont. — Real gross domestic product (GDP) advanced 1.7% in 2003, almost half the pace set in 2002, as exports fell for a third straight year, Statistics Canada reports.

However, the economy ended the year with its best showing in six quarters, as exports rebounded and GDP advanced a solid 0.9%. Much of the strength came late in the quarter, as growth accelerated from 0.2% in October and November to 0.5% in December.

Exports were the main source of strength in the fourth quarter, bouncing back from a four-quarter slump and helping manufacturing to a strong year-end. Consumer spending was flat, as retail activity was driven down by sharply curtailed sales of motor vehicles. Additions to business inventories were more than three times those of the third quarter.

Flat consumer and government spending in the fourth quarter coupled with a slowdown in business investment resulted in the weakest showing for final domestic demand (+0.3%) since the fourth quarter of 2001. As measured by the chain price index for GDP, economy-wide prices edged up 0.1% after gaining 0.9% in the third quarter.
Industrial production (manufacturing, mining and utilities) surged 1.6% in the fourth quarter, after a depressed first half of the year. Higher manufacturing and mining production more than offset reduced output in the utilities sector, as electricity generation declined for the third consecutive quarter. Industrial production in the United States advanced 1.3%, with all major components registering gains.

On an annualized basis, Canada’s GDP growth for the fourth quarter was 3.8%. South of the border, the U.S. economy grew at an annualized rate of 4.1%, down from 8.2% in the third quarter.

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