Economic activity picked up in the first quarter as real gross domestic product (GDP) advanced 0.9 percent on the heels of continued strength in investment and personal expenditure. In March, monthly output edged up 0.1 percent from February.
Service-producing industries surged ahead as retail and wholesale trade, finance, insurance and real estate all advanced. Output of goods-producing industries inched ahead as manufacturers continued to battle the effects of the rapidly increasing Canadian dollar, and growing international competition. Exports declined slightly, mainly automotive, forestry and industrial goods.
Production declined in the mining, utilities and non-durable manufacturing sectors. In total, industrial production fell 0.3 percent. In the United States the index of industrial production rose 1.3 percent, bolstered by manufacturing and mining, while utilities receded.
A jump in household demand, particularly consumer spending on durables and housing, was behind most of the first quarter advance. Growth in final domestic demand matched the pace set in the fourth quarter and continued to outpace overall growth in GDP.
Consumer spending accelerates Consumers began 2006 much the same way they began 2005, by purchasing large amounts of durable and semi-durable goods. Expenditure on clothing and footwear, furniture and furnishings, household appliances and recreational, sporting and camping equipment all climbed well over 3 percent.
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