OTTAWA (Reuters) — The Canadian economy slowed substantially in the final quarter of last year as exports fell and businesses held back on investments, suggesting the country was still hurting from low oil prices, data from Statistics Canada showed on Tuesday.
Even so, the 0.8 per cent annualized increase in gross domestic product in the fourth quarter topped both economists' and policymakers' expectations for zero growth in the quarter.
The third quarter was also revised up slightly to 2.4 per cent annualized, while growth in December was modestly better than expected with a pick up of 0.2 per cent.
Canada's economy contracted in the first two quarters of 2015, marking a mild recession as it was hit by the drop in the price of oil, a major export. The renewed downturn in oil prices has raised concerns growth could remain weak this year.
Indeed, on a non-annualized basis, goods exports dropped by 0.5 per cent in the fourth quarter, driven by a decline in aircraft and other transportation equipment and as exports of energy products fell 2.8 per cent.
Business investment in non-residential buildings and machinery and equipment fell by 3.3 per cent as companies spent less on engineering structures in the midst of cheap oil and weak investment in the sector. Lower oil prices also pulled mineral exploration down 8.2 per cent.