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The Canadian economy expanded at a pace of 1.7% over the final three months of 2017, a rate that was below the rapid growth seen in the first half of the year, Statistics Canada reported Friday.

The agency’s latest numbers for real gross domestic product showed the economy grew 3% for all of 2017, which was a much stronger pace than 2016 when growth was 1.4%.

The fourth-quarter expansion of 1.7% came in higher than growth in the third quarter, which was revised to 1.5% from 1.7%.

Growth in the fourth quarter was driven by a 2.3% increase in business investment compared with the third quarter, and a 0.5% quarter-over-quarter rise in household spending, the report said.

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For all of 2017, the agency said household spending easily made the biggest contribution to growth, followed by inventory and business investment. Exports also grew for the second-straight year with gains in both goods and services.

“Much of this growth was attributable to the first two quarters of 2017, with deceleration observed toward the end of year,” the report said.

Avery Shenfeld, managing director and chief economist of CIBC Capital Markets, said in a Friday statement that Q4 GDP growth “matched our call for a below-consensus 1.7% pace, and Q3 was revised down two ticks to 1.5%.” 

But he’s not disappointed, given “final domestic demand—what Canadians are buying—remained hot at a 3.9% pace in Q4, matching Q3,” he adds. Q4 was better than it looks on the surface given the health in domestic demand.”  

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The 3% figure for 2017 matches the projection by private-sector economists that was included in Tuesday’s federal budget. The budget predicts real GDP growth of 2.2% in 2018 and 1.6% next year.

Statscan revised its real GDP numbers upward for the first and second quarters of 2017.

For the first quarter, the estimate was increased to 4% from 3.7%. For the second quarter, revised growth was 4.4%, up from its initial reading of 4.3%.

By industry throughout 2017, the report said the growth was “widespread” with 18 of the 20 sectors showing increases.

Goods-producing industries expanded 4.6%, compared to two-straight annual contractions of 0.5% in 2016 and 1.7% in 2015. The biggest contribution to growth from the goods-producing industries in 2017 came from natural resources extraction, which expanded 7.8%.

Services industries expanded 2.8% last year for their highest pace of growth since 2011. It was led by a 7.5% boost from the wholesale-trade sector.

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