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Statscan - Real gross domestic product (GDP) increased 0.1% in the third quarter, the first quarterly gain since the third quarter of 2008. Final domestic demand advanced 1.2%, as capital investment and personal expenditures both increased. Real GDP was up 0.4% in September, as most major industrial sectors increased their production.

Final domestic demand was bolstered by a second consecutive quarterly gain in personal expenditures and the first expansion in business capital expenditure since the fourth quarter of 2007. Export and import volumes both increased after many quarters of decline.

The output of services-producing industries increased 0.6%, with the wholesale and retail trade sectors and real estate agents and brokers leading the way. Goods-producing industries (-1.4%) continued their downward trend that started in the third quarter of 2007, with the mining and oil and gas extraction contributing the most to the decrease as a result of temporary shutdowns.

The Canadian economy expanded at an annualized rate of 0.4% in the third quarter, compared with a 2.8% increase for the US economy.

Real gross domestic product, chained (2002) dollars¹
	Change	Annualized change	Year-over-year change
	%
First quarter 2008	-0.2	-0.7	1.7
Second quarter 2008	0.1	0.3	0.7
Third quarter 2008	0.1	0.4	0.3
Fourth quarter 2008	-0.9	-3.7	-1.0
First quarter 2009	-1.6	-6.2	-2.3
Second quarter 2009	-0.8	-3.1	-3.2
Third quarter 2009	0.1	0.4	-3.2

Consumer spending on goods and services rose 0.8%, the biggest increase since the fourth quarter of 2007. Households increased their spending on durable goods (+2.4%), particularly on new and used motor vehicles and on furniture. Purchases of services advanced 0.7%, similar to the previous quarter.

Business investment in machinery and equipment grew 5.9% in the third quarter, following five quarters of decline. Outlays on motor vehicles and industrial machinery led the surge.

Businesses reduced investment in non-residential structures by 3.6%, the fourth consecutive quarterly decline.

Investment in residential structures advanced for a second consecutive quarter. A 13% gain pushed ownership transfer costs related to housing resale activity to a record high. Investment in new housing construction fell 4.2%, following steeper declines in the first two quarters of the year. Renovation activity grew 2.8%, similar to the second quarter increase.

Government investment in buildings and engineering projects grew by 5.6%, the fourth consecutive quarter in which growth has been 4% or higher.

Exports of goods and services advanced 3.6% in the third quarter, the first increase since the second quarter of 2007. A 28% jump in exports of automotive products was the major contributor to the overall strength. Nonetheless, automobile exports were 29% lower than the third quarter of 2008. Energy product exports were up (+9.2%) in the quarter.

Imports grew 8.0% in the third quarter, following four consecutive quarters of decline. While gains were widespread, increases in the imports of automobile products (+25%) as well as machinery and equipment (+9.8%) were notable.

Non-farm inventories were drawn down for the third consecutive quarter. Manufacturing inventories were the main contributor to the draw down.

Farm inventories accumulated in the third quarter, after a drop in the second quarter.

The economy wide stock-to-sales ratio edged down, reversing the upward trend of the previous five quarters. Businesses held inventories equivalent to 69 days of sales, down from 71 days in the second quarter.

The price of goods and services produced in Canada was up 0.8%, following a small increase in the second quarter. The price of final domestic demand edged down 0.1% in the third quarter, as prices for machinery and equipment fell 3.3%. Prices for consumer goods and services rose 0.2%.

Real gross domestic income, a measure of the purchasing power Canada acquires from its production of goods and services, grew 0.8% in the third quarter, following four quarters of decline. Canada's terms of trade, a measure of export prices relative to import prices, strengthened for the second consecutive quarter, as import prices (-3.7%) fell more quickly than export prices (-1.4%).

Real gross domestic income, volume index (2002=100)
	Change	Annualized change	Year-over-year change
	%
First quarter 2008	0.5	2.2	4.0
Second quarter 2008	1.3	5.5	3.9
Third quarter 2008	-0.3	-1.1	3.1
Fourth quarter 2008	-4.3	-16.0	-2.7
First quarter 2009	-3.4	-12.9	-6.5
Second quarter 2009	-0.4	-1.6	-8.2
Third quarter 2009	0.8	3.3	-7.1

Nominal GDP increased 0.8% in the quarter, led by a 5.2% gain in corporate profits. Both had registered decreases over the previous three quarters. Non-financial and financial industries recorded higher profits in the third quarter.

Labour income (in nominal terms) was virtually unchanged, after decreases in the first two quarters of 2009. Employment was down in the third quarter while average hours worked were up slightly. An increase in government sector labour income offset a decrease in the business sector.

The personal saving rate was 4.8%, down from the previous quarter, as personal outlays advanced 0.8%. Personal income increased 0.3% as income from government transfers rose 1.4%.

Real gross domestic product rose 0.4% in September, after levelling off between June and August. Most major industrial sectors increased their production in September. Goods-producing industries advanced 0.9%, the first increase since July 2008, bolstered by mining and manufacturing. The services-producing industries continued to grow (+0.3%), on the strength of retail trade in particular. Conversely, accommodation and food services, utilities as well as agriculture retreated.

The output of the mining sector excluding oil and gas extraction grew 5.6%, mainly as a result of the reopening of some mines after shutdowns in July and August. Both non-metallic mineral mines (which includes diamonds) and iron ore mines increased their production substantially. Oil and gas extraction advanced 0.9% as a result of an increase in petroleum extraction, while natural gas facilities lowered their production.

The 1.1% increase in manufacturing output was widespread, with 15 of the 21 major groups advancing. Notable increases were recorded in the manufacturing of primary metals, beverage and tobacco products, plastics and rubber products as well as transportation equipment.

Value added in the retail trade sector rose 1.1% in September, with gains in most of the trade groups. Automotive products, as well as food and beverage stores, reported appreciable increases. The volume of activity in wholesaling advanced 0.4% in September, reflecting the strength in exports and manufacturing as well as the increased demand from retailers.

Construction activity was up 0.2% in September. Residential building construction and engineering and repairs work rose, while non-residential building construction retreated. Increased activity in the home resale market translated into a 2.8% advance in the output of real estate agents and brokers.

The accommodation and food services sector retreated, despite an increase in the number of international travellers coming to Canada. The decline in agriculture was largely attributable to weak crop production. Utilities were down due to weaker demand for both electricity and natural gas.

Canadian economic accounts key indicators¹
	Second quarter 2008	Third quarter 2008	Fourth quarter 2008	First quarter 2009	Second quarter 2009	Third quarter 2009	2007	2008
	Seasonally adjusted at annual rates
	millions of dollars at current prices
Gross domestic product by income and by expenditure
Wages, salaries and supplementary labour income	820,916	827,116	831,936	824,492	820,352	820,412	784,839	823,116
	1.0	0.8	0.6	-0.9	-0.5	0.0	5.6	4.9
Corporation profits before taxes	229,532	237,708	182,900	147,508	131,168	137,952	204,131	215,799
	7.7	3.6	-23.1	-19.4	-11.1	5.2	4.1	5.7
Interest and miscellaneous investment income	85,660	86,136	77,568	66,036	66,108	70,392	71,847	81,484
	11.9	0.6	-9.9	-14.9	0.1	6.5	7.7	13.4
Net income of unincorporated business	95,500	97,860	98,108	96,204	98,168	99,924	90,407	96,246
	2.1	2.5	0.3	-1.9	2.0	1.8	4.4	6.5
Taxes less subsidies	166,016	166,464	163,220	160,076	161,816	162,888	166,443	165,017
	1.0	0.3	-1.9	-1.9	1.1	0.7	3.7	-0.9
Personal disposable income	948,596	955,512	960,852	957,152	968,324	971,120	897,562	950,948
	1.0	0.7	0.6	-0.4	1.2	0.3	5.3	5.9
Personal saving rate²	3.4	3.1	4.9	4.9	5.5	4.8	2.5	3.7
	...	...	...	...	...	...	...	...
	millions of chained (2002) dollars
Personal expenditure on consumer goods and services	812,310	813,469	807,018	804,161	807,682	813,835	787,063	810,723
	0.3	0.1	-0.8	-0.4	0.4	0.8	4.6	3.0
Government current expenditure on goods and services	264,477	264,462	266,084	267,505	269,666	272,967	254,740	264,142
	1.1	-0.0	0.6	0.5	0.8	1.2	3.3	3.7
Gross fixed capital formation	318,118	318,616	305,999	286,610	282,922	288,951	312,482	315,265
	-0.1	0.2	-4.0	-6.3	-1.3	2.1	3.7	0.9
Investment in inventories	14,466	14,872	10,386	-10,570	-9,159	-5,815	15,006	12,272
	...	...	...	...	...	...	...	...
Exports of goods and services	493,352	488,152	464,964	425,584	403,076	417,723	510,323	486,255
	-1.0	-1.1	-4.8	-8.5	-5.3	3.6	1.1	-4.7
Imports of goods and services	589,968	584,824	547,196	483,115	474,549	512,501	572,078	576,905
	0.7	-0.9	-6.4	-11.7	-1.8	8.0	5.8	0.8
Gross domestic product at market prices	1,324,093	1,325,452	1,312,880	1,292,079	1,282,096	1,283,227	1,315,907	1,321,360
	0.1	0.1	-0.9	-1.6	-0.8	0.1	2.5	0.4
Gross domestic product by industry at basic prices
Goods producing industries	365,936	365,810	356,397	338,882	325,331	320,934	373,164	363,625
	-0.1	-0.0	-2.6	-4.9	-4.0	-1.4	0.7	-2.6
Industrial production	263,941	263,682	255,369	242,030	230,791	227,529	273,529	261,955
	-0.3	-0.1	-3.2	-5.2	-4.6	-1.4	0.1	-4.2
Energy sector	83,929	84,492	83,264	81,884	77,489	76,748	86,732	84,147
	-1.1	0.7	-1.5	-1.7	-5.4	-1.0	1.1	-3.0
Manufacturing	174,593	172,800	165,643	153,128	147,573	147,230	182,297	171,906
	0.0	-1.0	-4.1	-7.6	-3.6	-0.2	-1.3	-5.7
Non-durable manufacturing	68,532	67,745	66,018	64,124	62,405	62,432	70,835	67,604
	0.6	-1.1	-2.5	-2.9	-2.7	0.0	-2.3	-4.6
Durable manufacturing	106,397	105,400	99,819	88,794	84,889	84,498	111,904	104,617
	-0.4	-0.9	-5.3	-11.0	-4.4	-0.5	-0.5	-6.5
Construction	74,386	75,016	74,362	71,191	69,863	69,591	72,414	74,452
	0.5	0.8	-0.9	-4.3	-1.9	-0.4	3.9	2.8
Services producing industries	870,737	871,586	866,563	861,716	863,741	869,179	850,999	869,154
	0.3	0.1	-0.6	-0.6	0.2	0.6	3.6	2.1
Wholesale trade	72,201	70,795	67,321	64,641	64,771	66,058	70,318	70,693
	-0.4	-1.9	-4.9	-4.0	0.2	2.0	5.3	0.5
Retail trade	75,278	75,346	74,186	73,462	73,656	74,604	72,808	74,963
	0.3	0.1	-1.5	-1.0	0.3	1.3	5.4	3.0
Transportation and warehousing	58,778	58,635	57,425	55,975	55,321	55,900	58,045	58,323
	0.6	-0.2	-2.1	-2.5	-1.2	1.0	1.9	0.5
Finance, insurance, real estate and renting	246,472	247,014	246,830	247,182	250,967	253,434	241,258	246,623
	0.1	0.2	-0.1	0.1	1.5	1.0	4.0	2.2
Information and communication technologies	59,598	59,741	59,629	58,897	58,623	58,581	57,816	59,536
	0.7	0.2	-0.2	-1.2	-0.5	-0.1	4.4	3.0

Percentage changes for expenditure-based and industry-based statistics (such as personal expenditures, investment, exports, imports and output) are calculated using volume measures that are adjusted for price variations. Percentage changes for income-based statistics (such as labour income, corporate profits and farm income) are calculated using nominal values, that is, not adjusted for price variations.

The Frequently asked questions section on the National economic accounts module of our website has been updated with a series of questions and answers pertaining to recent economic events and how they are treated within the national economic accounts.

Additional data tables are available in Canadian Economic Accounts Quarterly Review (13-010-X, free).