Gross domestic product, income and expenditure, third quarter 2024
Released: 2024-11-29
Real gross domestic product (GDP) increased 0.3% in the third quarter, after rising 0.5% in both the second and first quarters. The contributions to GDP growth from higher household and government spending were moderated by slower non-farm inventory accumulation, lower business capital investment and lower exports.
On a per capita basis, GDP fell 0.4% in the third quarter, which was the sixth consecutive quarterly decline.
Chart 1
Real gross domestic product and final domestic demand
Chart 2
Contributions to percentage change in real gross domestic product, third quarter of 2024
Higher household spending leads growth
Household spending rose 0.9% in the third quarter, led by increased spending on new trucks, vans and sport utility vehicles. Higher spending on financial services also contributed to the increase in household expenditures, while spending on accommodation and food services fell.
Per capita household expenditures edged up 0.2% in the third quarter, after falling in six of the last eight quarters.
Chart 3
Change in total and per capita real household final consumption expenditure
Government spending rises for third consecutive quarter
Government expenditures increased 1.1% in the third quarter, the third consecutive quarterly increase since the decline in the fourth quarter of 2023. Spending across all levels of government increased in the third quarter of 2024.
Slower inventory accumulation dampens growth
Businesses continued to add to their non-farm inventories in the third quarter (+$18.5 billion) but at a slower pace compared with the second quarter (+$27.8 billion). The slower overall inventory accumulation was due to reduced accumulations in retail motor vehicles and drawdowns in inventory of manufacturing durable and non-durable goods.
Business investment falls due to lower spending on machinery and equipment
Business spending on machinery and equipment decreased 7.8% in the third quarter, led by lower spending on aircraft and other transportation equipment and parts. This coincided with decreased imports of aircraft and ships, following a significant rise in the previous quarter.
Business investment in non-residential structures was virtually unchanged in the third quarter, as the decline in business non-residential building construction offset the increase in engineering structures.
Business spending on intellectual property products increased 1.4% in the third quarter, mainly due to increased spending on research and development (+4.2%) and mineral exploration and evaluation (+3.0%).
Investment in new residential construction continues to fall, while resale activity rises
Housing investment increased 0.8% in the third quarter, the first expansion since the third quarter of 2023. The growth in the third quarter of 2024 was due to higher ownership transfer costs (+4.9%), which represent resale activity. Conversely, spending on renovations (-0.4%) and new construction (-0.1%) declined. Increased work-put-in-place for new units, primarily singles and apartments, was offset by a marked decrease in absorptions of apartments in Ontario.
Chart 4
Housing investment
Exports decline more than imports
Exports of goods and services fell 0.3% in the third quarter, after declining 1.4% in the second quarter. The leading contributors to the decrease in the third quarter were lower exports of unwrought gold, passenger cars and light trucks, and travel services. An increase in exports of crude oil and bitumen moderated the overall decrease.
Imports of goods and services edged down 0.1% in the third quarter, after a 0.2% decline in the second quarter. Lower imports of passenger cars and light trucks led the decrease in the third quarter, followed by other transportation equipment and parts and metal ores and concentrates.
Chart 5
Volumes of exports and imports
Gross domestic product deflator up on higher prices for government and household expenditures
The GDP deflator increased 0.6% in the third quarter, as prices were up for both government and household final consumption expenditures. Import prices also rose, while export prices declined, lowering the terms of trade—the ratio of the price of exports to the price of imports—for the fourth consecutive quarter.
Chart 6
Gross domestic product price indexes, selected components
Compensation of employees rises
Compensation of employees rose 1.7% in the third quarter, driven by wage growth in finance, real estate and company management (+3.1%) and educational services (+3.3%). Growth in educational services reflected the collective bargaining agreements signed in Quebec and Ontario and the resulting wage rate increases and retroactive payments.
Map 1
Compensation of employees, quarter-to-quarter % change, seasonally adjusted data
Prince Edward Island (+2.7%) had the largest increase in compensation of employees, followed by Quebec (+2.5%) and New Brunswick (+2.4%). Yukon's compensation of employees declined 2.1% in the third quarter, coinciding with a closure of a large gold mine.
Household saving rate up on higher wages and declining interest payments
Household net saving increased in the third quarter, as disposable income (+2.3%) grew at double the rate of spending (+1.2%) (in nominal terms). Disposable income gains were mainly due to wages and salaries, while the drag of rising interest costs lessened, as interest payments on mortgages and consumer credit (-0.6%) declined for the first time since the third quarter of 2021. The Bank of Canada cut the policy interest rate by 75 basis points from June to September 2024, and it announced further cuts in October. Consequently, the household saving rate reached a three-year peak of 7.1% in the third quarter, up from 6.2% in the second quarter. By comparison, the saving rate at the end of 2019 was below 3.0%. The household saving rate is aggregated across all income brackets; in general, saving rates are greater in higher income brackets.
Corporate income decline led by manufacturing, wholesale and retail sectors
Corporate income fell 1.1% in the third quarter, after increasing 2.1% in the previous quarter. This decrease was attributable to a weaker gross operating surplus among non-financial corporations (-1.4%). The decline for non-financial corporations was broad-based, led by the motor vehicle industries within the manufacturing, wholesale and retail sectors. Oil and gas extraction and petroleum manufacturing softened the overall decrease with positive growth related to increased output. Services were also generally positive, with continued growth being observed in transportation and warehousing activity.
Gross operating surplus for financial corporations (+0.9%) continued to grow in the third quarter despite destructive weather events that negatively impacted the surplus of property and auto insurance companies. The third quarter was the second costliest in terms of insured damages in Canada's history, given several concurrent and significant weather-related events: the Calgary hailstorm, the impact of Hurricane Debby in Quebec, flooding in southern Ontario and the Jasper wildfires. Offsetting the lower surplus for property and auto insurance companies was higher income in the banking sector, where falling interest rates enabled higher spreads between loans and deposits.
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Sustainable development goals
On January 1, 2016, the world officially began implementing the 2030 Agenda for Sustainable Development—the United Nations' transformative plan of action that addresses urgent global challenges over the following 15 years. The plan is based on 17 specific sustainable development goals.
Data on gross domestic product, income and expenditure are an example of how Statistics Canada supports the reporting on global sustainable development goals. This release will be used to measure the following goals:
Note to readers
Revisions to 2021 to 2023
In this release, new benchmark values from the supply and use tables (SUT) for the 2021 reference year have been incorporated into the gross domestic product (GDP) by Income and Expenditure Accounts (IEA). The SUT integrate data from a wide range of sources into a balanced accounting framework. They represent the most detailed, coherent accounting system for the structure of the Canadian economy and are considered the most accurate benchmarks on which to base estimates.
Updates to the 2022 and 2023 reference years reflect the incorporation of several new or updated data sources, including but not limited to the Annual Survey of Manufacturing and Logging, the Annual Survey of Research and Development in Canadian Industry, the Annual Wholesale Trade Survey, the Annual Retail Trade Survey, Government Finance Statistics, and various administrative data, such as T2 corporate filings and T1 personal and unincorporated business filings. Wages and salaries estimates were updated to reflect the final T4 employment income filings for 2022 and preliminary T4 data for 2023. Results from the Annual Capital and Repair Expenditure Survey, Actual, were incorporated for 2022, and 2023 estimates were revised to incorporate major project updates from the upcoming Actual 2023 release in February 2025.
For more information on the revisions to GDP by IEA, see "The 2021 to 2023 Revisions of the Income and Expenditure Accounts."
Changes to the estimation of occupied rental units
Starting with the first quarter of 2024, the stock of occupied rental units, which feeds into the estimation of expenditures on rent as well as rental income, was updated to account for rental vacancy data published by the Canada Mortgage and Housing Corporation.
Changes to data sources and estimation method for expenditure on new passenger vehicles
Starting with the third quarter of 2024, changes have been made to the data sources and methods used to estimate expenditures on new passenger vehicles. The New Motor Vehicle Survey is used to estimate the quarterly movement in nominal expenditures and the Consumer Price Index for passenger vehicles is used as the deflator. These changes were made because the previously used data source for vehicle prices became unavailable.
Accounting for First Nations Settlements
As of this release, the IEA have been revised to account for the Robinson Huron Treaty settlement agreement in the first quarter of 2024. A transfer of funds in the form of current transfers from the Federal government and the Ontario provincial government to Indigenous governments, which include the 21 Robinson Huron Treaty First Nations, has been recorded. These funds may subsequently be disbursed to individual members of the 21 First Nations or used collectively. Further impacts on household disposable income and savings will be determined when additional information is available. This revision led to a significant but temporary impact on the federal government's budget deficit (on a national accounts basis) during the first quarter. This budget deficit also reflects the impact of the First Nations Child and Family Services settlement announced by the Government of Canada, which was incorporated into the IEA as of the second quarter of 2024.
Accounting for e-commerce transactions with non-resident vendors
The indicators used to estimate Household Final Consumption Expenditure have been adjusted to account for non-resident e-commerce sales. The Monthly Retail Trade Survey collects data only on resident vendor e-commerce sales. The non-resident vendor e-commerce adjustment, which is applied to the indicators to estimate household consumption, mainly the Retail Commodity Survey, is a non-seasonally adjusted, quarterly value. This adjustment has been in place since the fourth quarter of 2019. For the third quarter of 2024, the adjustment represents $803.8 million, applied to the household consumption indicators. The adjustment is derived using sources such as details from customs transactions, goods and services tax remittances and financial statements for certain enterprises.
General
Percentage changes for expenditure-based statistics (such as household spending, investment and exports) are calculated from volume measures that are adjusted for price variations. Percentage changes for income-based statistics (such as compensation of employees and operating surplus) are calculated from nominal values; that is, they are not adjusted for price variations. Unless otherwise stated, growth rates represent the percentage change in the series from one quarter to the next: for instance, from the second quarter of 2024 to the third quarter of 2024.
For information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
Real-time tables
Real-time tables 36-10-0430-01 and 36-10-0431-01 will be updated on December 9, 2024.
Next release
Data on GDP by income and expenditure for the fourth quarter will be released on February 28, 2025.
Products
The data visualization product "Gross domestic product by income and expenditure: Interactive tool," which is part of the Statistics Canada – Data Visualization Products series (71-607-X), is now available.
The document "The 2021 to 2023 Revisions of the Income and Expenditure Accounts," which is part of Latest Developments in the Canadian Economic Accounts (13-605-X), is now available.
The document "Revisions to Canada's GDP," which is part of Latest Developments in the Canadian Economic Accounts (13-605-X), is available.
The Economic accounts statistics portal, accessible from the Subjects module of the Statistics Canada website, features an up-to-date portrait of national and provincial economies and their structure.
The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is available.
The Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-X) is available.
Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).
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