Exports keep fourth-quarter GDP on the upswing

OTTAWA (March 2) — Canada’s economy grew at a 4.6% annual clip in the fourth quarter of 1998, according to Statistics Canada, exceeding the third quarter’s 1.7% growth rate and economists’ expectations of a 3.5% gain.

The value of Canadian goods exports rose at a 5.5% annual rate in the fourth quarter to $341.596 billion, after rising 3% in the third quarter to $323.908 billion.

Canada’s fourth-quarter gain reflects “a strong push” to rebuild inventories at automakers and manufacturers of automotive parts following summertime strikes at General Motors Corp., the agency reported. In response to U.S. demand, Canadian exports of motor vehicles soared nearly 25% in the final three months of the year.

For the full year, Canada’s economy expanded 3%, compared with 3.8% GDP growth in 1997.

Growth for business investment in machinery and equipment accelerated to 1.9% in the fourth quarter, with spending gains concentrated in computers and transportation equipment.

The aggregate price level, as measured by the GDP chain price index, edged down 0.1% in 1998, the first annual price decline in decades. Sagging international demand pulled down prices of many primary products. Crude oil prices fell 27.4% in 1998, largely due to oversupply in world markets.

Import prices were comparatively strong (+3.8%) in 1998, largely due to exchange-rate effects. This was reflected in the chain price index for final domestic demand, up 1.2% for the year.