Canada's growth surprises markets to upside, as economy grows 2.8%

Robust export growth, strong business investment and consumer spending boosted the Canadian economy by an annualized 2.8% in the third quarter, following an upwardly revised growth of 3.6% in the previous three-month period, Statistics Canada said. The data overshot economists expectations of a 2.1% growth as well as beat the Bank of Canada's estimate of a 2.3% increase for the quarter. Canada's export sector continued to show signs of ongoing recovery, with exports of goods and services surging 6.9% at an annualized rate in the three months through September after soaring 19% in the previous quarter. Another key driver adding to growth was household final consumption expenditure, which rose 2.8% in the third quarter. This, however, marked a slowdown from the previous quarter, but still represented substantial growth. At the same time, business investment in residential structures advanced 12.5%, the fastest pace since the beginning of 2012. Also, business investment in non-residential structures, machinery and equipment inched higher by 0.5% and investment in intellectual property products skyrocketed 15.9%. Services sector also contributed, advancing 3.2% in value added, with wholesale and retail trade spurring growth. 

On a monthly basis, real GDP rose 0.4%, as expected, after falling 0.1% in August. The increase was mainly due to higher oil, gas and mining extraction, as well as manufacturing.