Canada Economy Revives with 3.6% Export Surge in Q2

Canada's economy has found its footing thanks to a surge in exports. The country's GDP grew at an annualized pace of 3.3% in the second quarter, driven by a 3.6% jump in exports and firmer consumer spending.

The rebound was broad-based, with output rising 0.8% quarter-on-quarter over the three months ending June. Domestic demand, which measures what Canadians spent and businesses invested at home, returned to growth after six months of barely any expansion.

Households were a major contributor to the growth, with consumer spending increasing by 0.8%, its strongest in three quarters. Businesses also stepped up their investment, with a 2.3% rise in the second quarter, led by building projects and spending on machinery and equipment.

However, there were some soft spots. Government capital spending fell again, and an early estimate suggested that July was largely flat, raising questions about whether this is the start of a trend or a one-off burst.