Behind the Headlines September, 2007

Article Excerpt

The Canadian economy grew at an annualized rate of 3.4% in the second quarter, well ahead of the Bank of Canada’s forecast of 2.8%. That followed strong growth of 3.9% in the first quarter. Consumer spending, which makes up almost 60% of our economy, grew at an annualized rate of 4.9% in the second quarter, up from 3.4% in the first quarter. Home building grew 5.2% in the quarter. And despite falling housing sales and prices in the U.S. due to the subprime mortgage problems, Canadian housing markets remain strong. In July, Canadian home resales rose 10% to a new record. Auto sales also continue to rise in Canada. Auto makers sold a record 158,624 vehicles in August, up 3.1% from 153,905 a year earlier. Despite the good economic statistics, investors must keep in mind that a lot of our growth comes from the rise in commodity prices, particularly metals and oil. Unlike many advanced countries, Canada is a major exporter of these and other…

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