Canada’s economic growth slowed to an annualized rate of 0.3 per cent in the fourth quarter, the worst performance in almost four years, thanks in part to strikes, bad weather and shutdowns, Statistics Canada said on Friday.
The increase matched both the forecast of analysts in a Reuters poll as well as the Bank of Canada’s prediction. Statscan also revised the third quarter annualized growth down to 1.1 per cent from an initial 1.3 per cent.
Statscan cited pipeline shutdowns, bad harvest conditions, an eight-day railway strike in Canada, the spillover effect of a U.S. auto workers’ strike and global trade tensions. The growth figure was the worst since a 2.0 per cent drop in the second quarter of 2016, when fire ripped through an oil-producing region.
Household spending on services jumped by 0.8 per cent over the third quarter while business investment in machinery and equipment fell by 3.6 per cent, the third consecutive decline. Export volumes dropped by 1.3 per cent.
The Bank of Canada’s next interest rate decision is on March 4 and market expectations of a cut have jumped as the economy faces challenges from rail blockades and a coronavirus outbreak. The central bank has left rates unchanged since October 2018.