Canada’s economy posted a sharp rebound in the second quarter, growing at an annualized 3.3% after a modest 0.3% gain in the first quarter, according to Statistics Canada. The improvement reflects a revival in both export activity and domestic demand.

Export growth fuels the surge

Outbound shipments rose 3.6%, the fastest pace in more than three years, providing a key boost to overall GDP. Analysts note that the stronger export performance helps offset lingering effects of the North American trade disruptions caused by U.S. tariff measures.

Domestic consumption leads the way

Final domestic demand, which aggregates consumer spending and business investment, rebounded to a 1% contribution in the quarter. Household final consumption expenditure increased 0.8%, its highest level in three quarters, indicating that Canadian families are spending more on goods and services.

Business investment returns

Business gross fixed capital formation jumped 2.3% after a 1.3% contraction in the prior quarter, marking the first expansion in roughly 18 months. Growth was spread across residential and non‑residential structures as well as machinery and equipment.

Government spending still declines

In contrast, general gross fixed capital formation – essentially government outlays for creating assets – continued to fall, contracting 2.9% in the second quarter after a 2.6% decline previously.

Quarterly and monthly snapshots

On a quarterly basis, GDP rose 0.8% for the period ending June, while month‑over‑month growth in June was 0.3% against a 0.2% forecast. An advanced indicator suggested the economy was largely flat in July.

The Bank of Canada had projected a 2.5% annualized growth rate for the quarter, so the actual 3.3% figure represents a notable upside.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.